US open: Stocks gain despite weak retail sales figures
US stocks rallied despite a report on retail sales in the world's biggest economy coming in flat.
US retail sales were unchanged in July, following a 0.2% rise in June, missing the consensus forecast for a 0.2% increase, as sales fell at auto dealers and department stores.
"Although July's US retail sales figures suggest that spending in the third quarter got off to a slow start, this doesn't necessarily means that third-quarter gross domestic product growth will be weak," said Capital Economics.
The research firm said the weakness could be merely a payback from the strength in sales in previous months and improvements in income and easier access to credit should support spending over the rest of the year.
Another report showed mortgage applications for the week to 8 August fell 2.7% following a 1.6% rise the previous week.
Meanwhile, geopolitical tensions continued as Israel prepared for fresh battles in Gaza and Ukraine said it would block humanitarian aid from Russia. Kurdish forces continued to fight militants in northern Iraq as Prime Minister Nouri al-Maliki tried to hold onto power.
In corporate news, department store chain Macy's retreated after the company disappointed with its second-quarter results and lowered its sales guidance for 2014. The company now expects same-store sales to grow by 1.5-2% this year, down from a previous forecast of 2.5-3%.
Agricultural machinery maker Deere & Co slumped after saying that equipment sales would fall by 6% this fiscal year, below the previous 4% guidance. The company said it would scale back production with grain prices being weighed down by record crops.
The 10-year yield fell two basis points to 2.43%.
West Texas Intermediate futures dropped 0.02% to $97.35 per barrel, according to the ICE.
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