Wall Street Up as Consumer, Financial Stocks Lead Gains

Wall Street rose in early afternoon trading on Thursday, helped by a rally in financial and consumer discretionary stocks after strong U.S. economic data put the likelihood of a September rate hike back on the table.

Cisco rallied 3.9 per cent to $28.99, set for its best day since February, after its profit beat expectations. The stock gave the biggest boost to the Nasdaq and the S&P.

U.S. retail sales rebounded in July, while the trend of weekly jobless claims pointed to a tightening job market, increasing the likelihood that the Federal Reserve would raise interest rates as early as September.

The S&P consumer discretionary index rose 1.1 per cent, the highest among the major 10 S&P sectors.

The S&P financial index rose 0.46 per cent, after falling in the previous two session on speculation that the Fed would wait until December to raise rates after China devalued the yuan on Tuesday. The yuan has declined since.

But, economists still expect the Fed to raise rates as early as next month, according to a Reuters poll published on Thursday.

Though China said its strong economic fundamentals provided "strong support" for the yuan, sources told Reuters that some within the government were pushing for the yuan to go even lower.

"People are still worried about China because the country is so opaque and there are always questions regarding the official numbers," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh, Pennsylvania.

At 12:57 p.m. ET (1657 GMT) the Dow Jones industrial average was up 57.22 points, or 0.33 per cent, at 17,459.73. The S&P 500 was up 5.61 points, or 0.27 per cent, at 2,091.66 and the Nasdaq Composite was up 22.51 points, or 0.45 per cent, at 5,066.89.

The S&P energy index declined 1.1 per cent as oil prices fell to a near six-and-a-half year low on worries over a growing global glut.

In corporate news, two top U.S. retailers posted contrasting quarterly results.

Coty rose 5.9 per cent to $30.44 after its sales beat estimates for the first time in five quarters, while Kohl's fell 9.6 per cent to $55.55 after its same-store sales missed expectations.

News Corp rose 5.3 per cent to $14.88 after the Wall Street Journal owner's profit topped estimates, helped by cost cuts at its news business, including Dow Jones.

Tesla rose 1.6 per cent to $242.07 after unveiling plans to raise about $500 million through a share sale, with CEO Elon Musk buying shares worth up to $20 million.

Advancing issues outnumbered decliners on the NYSE by 1,462 to 1,460. On the Nasdaq, 1,556 issues rose and 1,130 fell.

The S&P 500 index showed 21 new 52-week highs and seven new lows, while the Nasdaq recorded 37 new highs and 59 new lows.