NEW YORK (AP) — Stocks moved higher Tuesday after a surprising gain in retail sales in July provided more evidence that American shoppers are still spending even as their counterparts in Europe and Asia slow down.
The Dow Jones industrial average rose 32 points to 13,202 as of 11 am. The broader S&P 500 index added four points at 1,408 and the Nasdaq composite index rose 10 points to 3032.
U.S. retail sales rose in July by the largest amount in five months as Americans spent more on cars, furniture and clothes.
The gain, which was better than analysts had expected, was suggested that the U.S. economy was strengthening. Investors sold low-risk assets, sending the yield on the benchmark 10-year Treasury note up to 1.72 percent from 1.66 percent late Monday.
The stock market's gains were held in check by reports that U.S. companies barely increased their inventories in June and that sales fell by the largest amount in more than three years. The slower restocking trend could act as a drag on overall economic growth. When businesses place fewer orders, factory production slows.
"The data points to the fact that the economy is stabilizing at a lower level," said Peter Cardillo, chief market economist at investment bank Rockwell Global Capital. "While the economy isn't slipping further, it leaves open the possibility of the Fed's support for the economy to grow at a better rate."
Many economists believe the Federal Reserve will try to stimulate the economy by launching another program of buying government bonds and mortgage-backed securities to push interest rates lower. They will also be watching Fed Chairman Ben Bernanke speaks on Aug. 31 at an annual economic conference in Jackson Hole, Wyo.
Home Depot jumped $1.68 to $54.52. The world's biggest home-improvement retailer posted a 12 percent jump in net income and increased its earnings forecast for the entire year. Home Depot's fortunes are closely tied to the housing market, which has been improving. On Thursday, the Department of Commerce releases the housing starts and building permits report for July.
Among other stocks making big moves:
— Groupon plummeted 23 percent. The online coupon company's stock fell to an all-time low of $5.80, down $1.75 after its sales growth fell short of expectations partly due to worsening conditions in Europe.
— Estee Lauder rose $4.97 to $59.94. The beauty company, whose brands include MAC and Aveda, reported results that topped Wall Street expectations. The company also raised its revenue forecast for the year.
— Saks rose 63 cents, or 6 percent, to $11.48. The luxury retailer posted a loss, but sales at stores open at least a year rose 4.7 percent, underscoring the strength of wealthy shoppers.