US stocks rise after figures show stronger consumer spending

US stocks rise after figures show stronger consumer spending

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Stocks, Dollars, Money, Wall Street

US stocks rose again today as investors were pleased with a report that showed spending by consumers grew in July along with wages and salaries.

Healthcare and technology companies led the way and the Nasdaq composite closed at a record high.

The Commerce Department said consumer spending grew at its fastest pace in three months.

Companies that sell everything from cosmetics to toys to shoes advanced as investors bet Americans would shop more.

Biotech drug companies, drug distributors, and scientific equipment companies made some of the biggest gains in healthcare.

Technology companies advanced for the fourth day in a row and closed at record highs. Gasoline futures continued to spike as Tropical Storm Harvey left large parts of oil drilling and refining and pipelines out of commission.

The Commerce Department said consumer spending rose 0.3% in July, the best showing in three months, as wages and salaries increased.

Stocks climbed a day ago after the government raised its estimate of second-quarter economic growth. On Friday investors will look at the government’s monthly jobs report for data on employment as well as wages.

“The economy is gaining traction, and inflation at this stage is still modest,” said Quincy Krosby, chief market strategist at Prudential Financial.

That has been good for stocks, as low inflation and low interest rates make stocks more appealing and securities like bonds less appealing.

Mr Krosby added that other news, including a manufacturing survey from China, “helped underpin the notion that it is a global recovery in the economy”.

The Standard & Poor’s 500 index climbed 14.06 points, or 0.6%, to 2,471.65, its highest close in three weeks. That allowed the index to finish August with a tiny gain.

The Dow Jones industrial average added 55.67 points, or 0.3%, to 21,948.10.

The Nasdaq composite gained 60.35 points, or 1%, to 6,428.66, above the record high it set in late July. The Russell 2000 index of smaller-company stocks picked up 13.95 points, or 1%, to 1,405.28.

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