Wall St up - Time Warner Cable jumps

Specialist Jason Hardzewicz, left, and trader Michael Zicchinolfi work on the floor of the New York Stock Exchange. File photo / AP

Wall Street moved higher, as a surprise deal for Comcast to buy Time Warner Cable offset a drop in Cisco shares and weaker-than-expected US retail sales and weekly jobless claims.

Shares of Time Warner Cable soared, last up 9.3 per cent, after Comcast agreed to buy the cable company. Shares of Comcast were last 4 per cent weaker.

"This leaves Comcast as the sole king of the cable hill, with John Malone and Charter hitting a brick wall in their hopes of becoming a close No. 2," Richard Greenfield, an analyst with BTIG, told Bloomberg News. "This is a game changer for Comcast."

In afternoon trading in New York, the Dow Jones Industrial Average rose 0.10 per cent, the Standard & Poor's 500 gained 0.17 per cent, while the Nasdaq Composite Index added 0.40 per cent.

Gains in shares of UnitedHealth, last up 0.9 per cent, and those of IBM, last up 0.8 per cent, led the Dow higher.

Shares of Cisco posted the largest slide in the Dow, last 3.9 per cent weaker. The company predicted sales that fell short of expectations.

The latest US economic data were disappointing. Retail sales unexpectedly dropped 0.4 per cent in January, following a revised 0.1 per cent decline the previous month. Separately, jobless claims unexpectedly rose, rising by 8,000 to 339,000 in the week ended February 8.

"I don't think we're going to see clean data until probably April, since March is still expected to have bad weather, though not as severe as the winter months," Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut, told Reuters. "Right now markets are still giving the economy the benefit of the doubt."

In other negative surprises, shares of Whole Foods Market dropped, last 7.4 per cent weaker, after the company downgraded its 2014 sales forecast for the second time in less than six months.

In Europe, the Stoxx 600 Index slid 0.2 per cent, as did the UK's FTSE 100. France's CAC 40 rose 0.2 per cent, while Germany's DAX climbed 0.6 per cent.

Shares of Rolls-Royce sank 13.6 per cent after the company said it expected sales and profit would not increase this year as military budgets are cut in the US and Europe.

"In 2014, we expect a pause in our revenue and profit growth, reflecting offsetting trends across the business," John Rishton, Rolls-Royce chief executive, said in a statement. "This is a pause, not a change in direction, and growth will resume in 2015."

"Our record order book underpins our confidence in the long-term growth of our business," Rishton said.

The company's outlook caught analysts and investors off guard.

"It's clearly shocked the market," Investec analyst Chris Dyett, who cut his profit guidance for Rolls-Royce by about 11 per cent, told Reuters. "It's a weaker backdrop than we have factored in previously. It's dragged everything else down."