* Year-on-year CPI up 1 pct, smallest gain in four years
* October retail sales exceed forecast, show demand picking
* J.C. Penney shares jump after results
* Priceline stock up on Goldman bullish view
* Dow up 0.1 pct, S&P 500 up 0.1 pct, Nasdaq up 0.2 pct
By Luke Swiderski
NEW YORK, Nov 20 U.S. stocks gained slightly on
Wednesday after data showed the annual inflation rate was
subdued and ahead of the release of the minutes from the Fed's
most recent policy-setting meeting.
The Consumer Price Index dipped 0.1 percent last month and
rose only 1 percent for the 12 months through October, the
smallest year-over-year increase since 2009. The Federal
Reserve's target inflation rate is 2 percent so the CPI data
gives the central bank one less reason to cut back its stimulus
J.C. Penney shot up 7 percent to $9.32. It was the
S&P 500's best performer after the department store operator
said November sales were encouraging. The results indicated that
a turnaround of J.C. Penney is starting to "take hold," Chief
Executive Myron Ullman told analysts on a call.
"To me, there's a big inflection point that took place
today. Investor concerns have now switched from 'Are they going
bankrupt? Do they have enough liquidity?' to 'How is this
turnaround playing out? 'It's a change of narrative to the
positive," said Mike Binger, senior portfolio manager at
Gradient Investments in Minneapolis, referring to J.C. Penney.
The market may get another catalyst with the release of the
minutes from the Fed's most recent policy-setting meeting, due
at 2 p.m. EST (1900 GMT). The minutes will be scrutinized for
further clues on the future of a policy that has put the S&P 500
on track to post its best year in a decade.
The Dow industrials climbed above 16,000 earlier on
Wednesday, touching an intraday high of 16,016.85, and then
pulled back slightly. The Dow has traded above 16,000 over the
last couple of sessions but failed to close above that level,
while the S&P 500 faces resistance at 1,800. A solid move above
those levels could further attract investors and money managers
eager to chase performance.
The Dow Jones industrial average rose 10.56 points or
0.07 percent, to 15,977.59. The S&P 500 gained 1.68
points or 0.09 percent, to 1,789.55. The Nasdaq Composite
added 8.48 points or 0.22 percent, to 3,940.04.
Deere & Co shares advanced 2.4 percent to $84.78
after the maker of tractors and harvesters reported
higher-than-expected fourth-quarter profit and forecast 2014
earnings above estimates.
Home improvement chain Lowe's shares fell 4.6
percent to $48.11. The stock was the S&P 500's second-biggest
drag after the retailer reported slightly lower-than-expected
quarterly earnings and gave a disappointing outlook for the
year. The results underscored Lowe's struggle to catch up with
Home Depot, the market leader.
Priceline gained 3.2 percent to $1,154.21 after
Goldman Sachs added the online travel company's stock to its
"conviction buy" list.
In another snapshot of the economy from Wednesday's data,
October retail sales excluding automobiles, gasoline and
building materials - a gauge of consumer spending known as core
retail sales - rose 0.5 percent, exceeding expectations. The
figure shows demand is picking up.
Fed Chairman Ben Bernanke, in a speech late Tuesday that
echoed dovish comments by his nominated successor, Janet Yellen,
said the U.S. central bank will maintain its ultra-easy monetary
policy for as long as needed. The policy has been a pillar of
the stock market's rally.
A Reuters poll published before Wednesday's data showed
economists expected the Fed to begin reducing its $85 billion in
monthly bond purchases by March, with a small chance it could do
so as early as January.
Commerce Department data showed that U.S. business
inventories grew more than expected in September, suggesting the
government's estimate of third-quarter growth could be revised
higher. In contrast, U.S. existing home sales fell in October to
the lowest since June because of an inventory shortage and high
property prices, the National Association of Realtors