NEW YORK – U.S. stocks rose, sending the Standard & Poor’s 500 Index to a record, after Macy’s Inc. jumped on better-than-estimated earnings and investors weighed the strength of the economy to assess when the Federal Reserve may scale back stimulus.
Macy’s jumped 9.5 percent, leading a rally among retailers, as earnings beat estimates. Tesla Motors Inc. advanced 2.4 percent as co-founder Elon Musk said the company won’t recall its Model S after fires involving the electric sedan. Phone shares declined as Verizon Communications Inc. lost 0.9 percent.
The S&P 500 gained 0.5 percent to 1,775.72 at 1:56 p.m. in New York, reversing an earlier decline of as much as 0.4 percent. The Dow Jones Industrial Average rose 23.41 points, or 0.2 percent, to 15,774.08. Trading in S&P 500 shares was in line with the 30-day average at this time of day.
“Investors are in need of additional data to assess when the Fed may taper, as well as the strength of the economy,” Kate Warne, a St. Louis-based investment strategist at Edward Jones & Co., said by phone. “This is a situation where the underlying fundamentals are positive for stocks. There hasn’t been anything that would snuff out that general direction, but stocks are waiting for the next piece of data that will determine the short-term direction.”
The S&P 500 has climbed to record levels this year as the Fed maintained its $85 billion in monthly asset purchases. Central bank support has helped propel the index higher by more than 160 percent from its March 2009 low. The gauge has rallied 25 percent so far in 2013, poised for its best year in a decade, and is trading at 16 times projected earnings, more than the five-year average of 14 times profit, according to data compiled by Bloomberg.
Reducing bond purchases “ought to be on the table at upcoming meetings” by the Federal Open Market Committee, including Dec. 17-18, Fed Bank of Atlanta President Dennis Lockhart said Tuesday. Central bank policy makers will probably scale back the monthly pace of bond buying to $70 billion at their March 18-19 meeting, according to the median of 32 estimates in a Bloomberg survey of economists on Nov. 8.