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Wall Street Breaks 3-Day Losing Streak As Tech Shares Advance

Stocks rose on Tuesday, sending all indices higher as Wall Street digested further confirmations that the Federal Reserve’s planned gradual drawdown of fiscal stimulus could become a reality
Michael Teague is a staff writer for Equities.com. His previous experience includes three years as the associate editor of Los Angeles-based Al Jadid Magazine, a bi-annual review of the arts & culture of the Middle East, where he contributed many articles on the region in the form of features and book & film reviews. His educational background includes a BA in French literature from the University of California, Irvine, where he developed a startling proclivity for anything having to do with the 19th century.
Michael Teague is a staff writer for Equities.com. His previous experience includes three years as the associate editor of Los Angeles-based Al Jadid Magazine, a bi-annual review of the arts & culture of the Middle East, where he contributed many articles on the region in the form of features and book & film reviews. His educational background includes a BA in French literature from the University of California, Irvine, where he developed a startling proclivity for anything having to do with the 19th century.

Stocks rose on Tuesday, sending all indices higher as Wall Street digested further confirmations that the Federal Reserve’s planned gradual drawdown of fiscal stimulus could become a reality before the end of the year.

The Standard & Poor’s 500 climbed 0.28 percent percent by the closing bell to 1,694.16 points, while the Dow Jones Industrial Average ended the session 0.2 percent higher at 15,451 points, and the NASDAQ finished at 3,684.44 points, an advance of 0.39 percent.

Data from the Department of Commerce was released indicating that July marked the fourth consecutive monthly increase in retail sales. Throughout the month, headline retail sales were up 0.2 percent to $425.5 billion, while June’s number was revised upward from an increase of 0.4 percent to 0.6 percent. The news was interpreted as a sign that consumers are managing the effects of spending cuts and the lapsing of Bush-era payroll tax cuts much better than had been expected.

Good economic news has been received cautiously in recent months however, as investors worry that a demonstrably improving economic environment will lead to the eventual curtailment of the Federal Reserve’s stimulus spending.

But Tuesday’s trading session was perhaps an indication that markets have finally been coming to terms with the fact that the Central Bank’s $85 billion in monthly bond purchases will eventually have to come to an end, as investors accommodated good economic data as well as Atlanta Fed President Dennis Lockhart’s statement that the first phase in the paring back of Treasury spending could be announced at any of the Federal Reserve’s upcoming meetings.

Tech stocks were the day’s success story, as significant advances for Hewlett-Packard (HPQ) , Qualcomm Inc. (QCOM) , and Broadcom Corp. (BRCM) lifted the S&P 500 higher. Shares for Apple (AAPL) were also a significant factor, as shares jumped over 5 percent by the closing bell on news that billionaire activist-investor Carl Icahn had taken a sizeable position in the company.

On the Dow, aerospace and defense monolith Boeing (BA) gained nearly two percent on word that 737 production could increase 12 percent by the end of the year, while tech shares led the way down on a 2 percent drop for Microsoft (MSFT) , with Verizon Communications (VZ) and Intel (INTC) in tow.

Tech shares lifted the NASDAQ higher, however, with Apple’s advance being followed by BlackBerry (BBRY) who was up over 10 percent at one point during the day as a result of the company’s announcement that it was looking to go private or put itself up for sale. Chinese internet software and services company Sina Corp. (SINA) gained over 4 percent.

Osiris Therapeutics (OSIR) made an incredible leap of nearly 140 percent by the conclusion of the day’s trading session, finishing at $25.44 after the stem-cell company announced that a trial of its living stem-cell treatment for diabetic foot ulcers was up to three times as effective as standard procedure.