US close: Strong spending data gives stocks a boost

Wall Street started the week on the front foot, with stronger-than-expected data on personal income stoking buying interest, even as Treasuries recouped a large part of the previous session´s losses, when Fed chair Janet Yellen said the odds of a rate hike had "strengthened".

The Dow Jones Industrials gained 107.59 points to 18,502.99, while the S&P 500 rose 0.52% or 11.34 points to finish the session at 2,180.38 and the Nasdaq Composite edged higher by 0.26% or 13.41 points to end the day at 5,232.33.

Data out on Monday revealed that personal incomes and spending increased at a month-on-month clip of 0.4% and 0.3%, respectively, in July, as expected by the consensus.

Nevertheless, income data for the previous two months was revised higher and hence estimates for the personal savings rate too.

"We view this a positive sign for consumption sustainability into Q3 and think it unlikely that precautionary savings are taking hold. We view consumers as confident at this point and expect strong consumer spending this year, driven by solid job market performance and a buoyant outlook for the economy," Barclays Research´s Blerina Uruci said in a research report sent to clients.

Perhaps the Fed´s most closely watched inflation gauge, the core rate for the personal consumption expenditures price-deflator, was steady in July at 1.6% year-on-year, which was one tenth of a percentage point more than economists had anticipated.

Despite that, US Treasuries saw sharp gains, sending the yield on the benchmark ten-year bond seven basis points lower to 1.56%.

To take note of, investors in the Treasury market might have been treading cautiously ahead of the release of the monthly US jobs report, due out on the following Friday, which several observers believed might factor heavily into the Fed´s decision-making when they next met to decide on policy in September.

According to the CME´s Fed Watch tool, the odds of a 25 basis point rate hike by the Fed at its December meeting stood at 54.2%.

From a sector standpoint, the best performing industrial groups on US stockmarket were: Platinum (2.72%), Aluminium (2.60%) and Coal (2.26%).

Herbalife was a standout gainer following news that activist investor Carl Icahn had picked up more than 2.3m shares in the nutrition specialist.

The KBW index of banks´ shares was again higher, advancing 0.86% to 71.61.

Front month West Texas Intermediate crude oil futures shed 27 cents to $47.37 per barrel on the NYMEX.

Dow Jones - Risers

E.I. du Pont de Nemours and Co. (DD) $70.45 1.15%
Travelers Company Inc. (TRV) $118.48 1.14%
American Express Co. (AXP) $65.52 1.13%
JP Morgan Chase & Co. (JPM) $66.95 1.10%
International Business Machines Corp. (IBM) $159.72 0.88%
McDonald's Corp. (MCD) $115.41 0.85%
Pfizer Inc. (PFE) $35.11 0.83%
Verizon Communications Inc. (VZ) $52.50 0.83%
Intel Corp. (INTC) $35.55 0.82%
Procter & Gamble Co. (PG) $88.30 0.82%

Dow Jones - Fallers

Nike Inc. (NKE) $58.63 -0.63%
Walt Disney Co. (DIS) $94.87 -0.36%
Apple Inc. (AAPL) $106.82 -0.11%
Microsoft Corp. (MSFT) $58.10 0.12%
Merck & Co. Inc. (MRK) $63.01 0.25%
Wal-Mart Stores Inc. (WMT) $71.40 0.37%
Visa Inc. (V) $80.87 0.37%
General Electric Co. (GE) $31.36 0.42%
Unitedhealth Group Inc. (UNH) $137.27 0.48%
Boeing Co. (BA) $132.90 0.51%

S&P 500 - Risers

CF Industries Holdings Inc. (CF) $24.98 4.17%
Tenet Healthcare Corp. (THC) $23.99 3.32%
Dollar General Corp (DG) $77.49 2.64%
Alcoa Inc. (AA) $10.26 2.60%
Newmont Mining Corp. (NEM) $40.91 2.45%
Micron Technology Inc. (MU) $16.91 2.42%
Nordstrom Inc. (JWN) $52.45 2.32%
United States Steel Corp. (X) $20.24 2.27%
Staples Inc. (SPLS) $8.68 2.24%
Wells Fargo & Co. (WFC) $49.56 2.16%

S&P 500 - Fallers

TEGNA Inc (TGNA) $20.43 -2.20%
Gilead Sciences Inc. (GILD) $78.17 -2.01%
Expedia Inc. (EXPE) $109.80 -1.40%
Kansas City Southern (KSU) $98.18 -1.30%
Alexion Pharmaceuticals Inc. (ALXN) $127.99 -1.27%
Csra Inc. (CSRA) $25.45 -1.24%
Best Buy Co. Inc. (BBY) $39.02 -1.17%
Kroger Co. (KR) $32.33 -1.07%
Illumina Inc. (ILMN) $170.42 -1.04%
Endo International Plc (ENDP) $20.82 -1.00%