By Ankika Biswas and Shreyashi Sanyal
(Reuters) - Wall Street's main indexes rose on Tuesday as a better-than-feared sales forecast by Best Buy eased worries of a dull holiday season for retailers anxious about consumers turning thrifty due to inflation.
Best Buy Co Inc (NYSE:BBY) jumped 12.4%, leading gains on S&P 500 index, after forecasting a smaller drop in annual sales than previously estimated, confident that a ramp up in deals and discounts will lure more customers.
"People are hopeful that consumers can still squeeze out a strong holiday season despite the headwinds they're facing," said Brandon Pizzurro, director of public investments at GuideStone Capital Management.
"It would be an upside surprise if consumers really brought their full wallet to the table this year, probably what's driving Best Buy movement today."
Gains in Best Buy boosted the S&P 500 retail sector index, but a 9.4% fall in Dollar Tree Inc (NASDAQ:DLTR) capped the upside as the discount retailer lowered its annual profit forecast for the second time.
Dow component Walgreens Boots Alliance (NASDAQ:WBA) Inc rose 1.7% after Cowen & Co upgraded the drug distributor stock, citing its healthcare services business push.
Meanwhile, markets were cautious as China strengthened its fight against COVID-19 with Beijing shutting parks, malls and museums, while other cities resumed mass testing.
U.S.-listed shares of Chinese companies including Pinduoduo Inc, Bilibili Inc and JD.com Inc slipped about 2% each.
There was also relief in risk markets, thanks to a drop in the dollar and the yield on the 10-year Treasury note. [FRX/] [US/]
At 12:17 p.m. ET, the Dow Jones Industrial Average was up 283.50 points, or 0.84%, at 33,983.78, the S&P 500 was up 33.20 points, or 0.84%, at 3,983.14, and the Nasdaq Composite was up 69.18 points, or 0.63%, at 11,093.69.
Energy led gains among the 11 major S&P 500 sector indexes, up 3.0%, as oil prices rose after top exporter Saudi Arabia said OPEC+ stuck with output cuts. [O/R]
Tesla Inc (NASDAQ:TSLA) shares attempted to recoup some declines, rising 0.8%, after falling 6.8% in the previous session.
Agilent Technologies Inc (NYSE:A) jumped 6.7% after the application-focused solutions company posted upbeat fourth-quarter revenue.
Investors will keep a watch on remarks by St. Louis Fed Reserve President James Bullard and Kansas City President Esther George, ahead of minutes from the Fed's November meeting on Wednesday.
Cleveland President Loretta Mester reiterated the Fed's stance that getting inflation down remains critical for the central bank, a day after supporting a smaller rate hike in December.
Analysts expect thin trading volumes as markets will be shut on Thursday for Thanksgiving holiday and stay open for half day on Friday.
Advancing issues outnumbered decliners by a 2.87-to-1 ratio on the NYSE and by a 1.23-to-1 ratio on the Nasdaq.
The S&P index recorded 20 new 52-week highs and three new lows, while the Nasdaq recorded 65 new highs and 166 new lows.