Shares of retailers and other consumer companies rose after a strong reading of retail sales and as investors shrugged off the Federal Reserve's intention to hike interest rates.
Retail sales, a measure of spending at stores, online and restaurants, rose by a seasonally adjusted 3.8% in January from the prior month, the Commerce Department said. "As it pertains to inflation, I think the Fed has to act, but it doesn't appear like [inflation] materially slowed consumer consumption and we saw that in today's retail sales report," said Oliver Pursche, senior vice president at financial advisory Wealthspire.
Consumer confidence could eventually be hit by the upward spiral in fuel prices, but the pain threshold has not yet been reached, said Mr. Pursche. "There is a number out there that will impact consumer behavior," said Mr. Pursche. "I don't know if it's $100 [per barrel]. We know it's not $90."
Mr. Pursche pointed to counter-currents that ease the shock of inflation: "let's not forget ... the labor participation rate is going up, unemployment is going down, and wages are going up," Mr. Pursche said.
Confidence among U.S. home builders decreased in February for the second consecutive month as production bottlenecks continued to raise construction costs and delayed projects, data from the National Association of Home Builders show.
Shares of food processor Kraft Heinz rallied, as the company, seen as a beneficiary of inflation trends, said it couldn't make enough Lunchables or Philadelphia cream cheese to meet demand in recent months.
Cereal maker Kellogg said some of its iconic cereal brands have lost ground in U.S. grocery stores, after a strike among factory workers and a fire slammed its production capabilities last year.
Walt Disney said it plans to start developing residential communities, starting with one in Rancho Mirage, in California's Coachella Valley.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
02-16-22 1728ET
