Stocks Rally After Fed Minutes Release

Retail shares up 1.1% as S&P 500 hits all-time high.

U.S. retail shares expanded on earlier gains and the major indices rallied from breakeven levels following the Federal Reserve’s latest comments suggesting measured increases in interest rates as the economy improves.

The S&P 500 Retailing Industry Group, up nearly all day, padded gains and closed ahead 1.1 percent at 894.51 for its second biggest gain of the month, just below the 1.2 percent advance logged on June 5.

Meanwhile, the S&P 500 finished the day up 0.8 percent at 1,956.98, the highest close in its history, after hitting an all-time high of 1,957.74 in the final half-hour of trading. The Dow Jones Industrial Average was up 0.6 percent to 16,906.62 and the Nasdaq Composite up 0.6 percent to 4,362.84.

The major indices had hovered near the breakeven point for much of the day but logged strong gains in the aftermath of the release of the Federal Reserve’s notes in which it indicated it would trim another $10 billion a month from its bond-buying program, with $35 billion a month now set.

The Fed also suggested it would take a measured approach to any increases in interest rates as economic improvement continues its gradual pace. “The unemployment rate, though lower, remains elevated,” the Fed said. The unemployment rate in May was 6.3 percent, unchanged from April and down from its 10 percent peak in October 2009.

Among U.S. retail, fashion and beauty stocks monitored by WWD, Joe’s Jeans Inc, scored the biggest advance, rising 4.8 percent to $1.10, followed by Citi Trends Inc.’s 4.4 percent gain to $21.81 and 3 percent increases for Lululemon Athletica Inc. and Avon Products Inc., which closed at $39.88 and $15. Vince Holding Corp. shares were up 2.9 percent to $36.60.

Among issues in decline were Elizabeth Arden Inc., down 4.4 percent to $28.40; Birks Group Inc., off 4.2 percent to $1.15, and Coach Inc., 4 percent lower at $39.19.
Coach shares are off 34.2 percent from their 52-week high of $59.58, reached July 24. The corresponding low of $38.56 was reached on June 12.

European markets stayed fairly close to their starting points for the day, with the FTSE 100 in London and FTSE MIB in Milan both up 0.2 percent, to 6,778.56 and 22,030.34, respectively, and the DAX in Frankfurt ahead 0.1 percent to 9,930.33. The CAC 40 in Paris was off 0.1 percent to 4,530.37.

Fashion and luxury stocks were generally on the losing side of the action,, with notable exceptions including Aeffe, up 10 percent to 1.37 euros, and Mulberry Group, up 2.5 percent to 7.33 pounds.

Decliners included Yoox, off 5.1 percent to 19.74 euros; Brunello Cucinelli, 2.6 percent to 15.97 euros; Asos, 2.5 percent to 27.93 pounds, and Geox, 1.8 percent to 2.66 euros.

Shares of The Mysale Group, which commenced trading on London’s AIM market, were down 2.4 percent to 1.83 pounds. Shares of the flash sale site operator opened on Monday amid confusion about whether trading had been denominated in pounds rather than pence.

The euro traded for $1.35 versus the U.S. dollar and the pound at $1.70.