* Nasdaq Biotech Index up 2.1 pct
* Retail stocks slip after soft data, Macy's outlook
* King, SeaWorld shares sink on weaker-than-expected revenue
* Dow up 0.6 pct; S&P 500 up 0.7 pct; Nasdaq up 1 pct
(Updates close with Dow back in positive territory for 2014 in
paragraph 1, Dow's settlement figure in paragraph 11)
By Akane Otani
NEW YORK, Aug 13 U.S. stocks ended higher on
Wednesday, with the Dow Jones industrial average returning to
positive territory for the year, as surging biotech shares
helped investors shrug off disappointing retail sales data.
Retail stocks capped the market's gains after Commerce
Department data showed that U.S. retail sales unexpectedly
stalled in July, marking the weakest report since January.
Macy's Inc reported quarterly earnings that missed
analysts' estimates and slashed its full-year same-store sales
forecast, driving the stock down 5.5 percent to $56.47.
The selloff in Macy's stock, a bellwether for department
stores, gave investors a reason to unload some shares of Kohl's
Corp, down 1.5 percent at $55.11; Nordstrom Inc,
down 0.9 percent at $68.12, and Wal-Mart Stores Inc,
down 0.3 percent at $74.03. All are expected to report results
Although the weak retail sales pointed to some loss of
momentum in the economy, the July reading could give the Federal
Reserve more support to move slowly on raising interest rates, a
situation that favors investors in equities.
"Investors seem to be looking past the retail numbers and
seeing the silver lining, which is that the Fed could be less
hawkish and keep interest rates down for longer," said Lawrence
Glazer, managing partner at Mayflower Advisors in Boston.
"Domestically, despite some questionable earnings reports,
areas like biotech, transports and Amazon all gave a boost to
All 10 S&P primary sector indexes gained, even as some
heavyweights' stocks plunged on missed earnings and downgraded
Biotech shares surged, with the Nasdaq Biotech Index
climbing 2.1 percent in sync with a rally in the stocks of
InterMune Inc and Jazz Pharmaceuticals PLC.
The Dow Jones Transportation Average gained 0.7
Investors have been sensitive in recent weeks to signs of
flaring tensions abroad, but were not affected on Wednesday. The
declaration by the White House that the United States would not
send combat ground troops to Iraq "has given the market some
upward momentum," said Kim Forrest, senior equity research
analyst at Fort Pitt Capital Group in Pittsburgh.
The Dow Jones industrial average rose 91.26 points,
or 0.55 percent, to close at 16,651.80. The S&P 500
gained 12.97 points, or 0.67 percent, to finish at 1,946.72. The
Nasdaq Composite added 44.88 points, or 1.02 percent, to
end at 4,434.13.
Wednesday's advance lifted the Dow back into the black for
2014 after last week's sharp selloff had wiped out the year's
For the year, the Dow is now up 0.45 percent.
After the bell, Cisco Systems Inc reported a
smaller-than-expected drop in quarterly revenue after the bell
and its stock lost 2.9 percent in extended-hours trading. The
network equipment maker had expected a revenue decline between 1
percent and 3 percent, but reported a drop of only 0.5 percent
An S&P index of healthcare stocks jumped 1.2
percent during the regular session and led the S&P 500 higher.
Vertex Pharmaceuticals shares, the biggest gainer in
the S&P 500 healthcare sector, shot up 3.9 percent to $88.75.
Amazon shares gained 2.2 percent to $326.28.
Earlier in the day, the company unveiled a $10 credit-card
reader and mobile app that will let it grab a bigger share of
the mobile payments and bricks-and-mortar retail markets.
The stocks of both King Digital Entertainment plc
and SeaWorld Entertainment Inc marked their biggest
one-day declines ever following quarterly results that missed
Shares of King, maker of the social media and mobile game
"Candy Crush Saga," plummeted 23.1 percent to close at $13.99.
SeaWorld shares sank 32.9 percent to end at $18.90 after the
company slashed its full-year revenue forecast because of a huge
controversy over its amusement park shows featuring killer
About 4.7 billion shares traded on all U.S. platforms,
according to BATS exchange data, compared with the five-day
average of 5.7 billion.
(Editing by Nick Zieminski and Jan Paschal)