Stocks lift in light pre-holiday trading
NEW YORK » Better-than-expected consumer confidence numbers and a drop in oil prices sent stocks higher yesterday, extending Wall Street's November rally in light pre-holiday trading.
Investors were encouraged by the University of Michigan's consumer confidence index, which came in at 81.6, slightly higher than the 81 reading Wall Street expected. That could bode well as consumers head to the malls tomorrow for the start of the holiday shopping season.
Oil prices dropped after the Energy Department reported substantial increases in the nation's fuel stockpiles. A barrel of light crude was quoted at $58.71, down 13 cents, on the New York Mercantile Exchange.
"This definitely helps the continuation of the rally," said Peter Cardillo, chief strategist and senior vice president at S.W. Bach & Co. "From here, I see the continuation of this rally through the end of the year."
The Dow Jones industrial average rose 44.66, or 0.41 percent, to 10,916.09.
Broader stock indicators also rose. The Standard & Poor's 500 index added 4.38, or 0.35 percent, to 1,265.61, and the Nasdaq composite index gained 6.42, or 0.28 percent, to 2,259.98.
Not all the economic news was good. A larger-than-expected increase in first-time jobless claims, which rose by 30,000 to 335,000 last week, had investors concerned that the labor market was still struggling to recover from disruptions caused by the Gulf Coast hurricanes.
The number of people who are continuing to collect unemployment claims remains high, at 2.82 million, a sign that workers laid off due to hurricanes are not easily finding jobs.
The day's trading was unlikely to be significant to the overall market in the coming weeks, as most investors were already in vacation mode. Volume is traditionally very light during the Thanksgiving holiday week; the markets will be closed today and trade in a shortened session tomorrow.
"This is the time of the year that the market, historically, goes up," said Barry Berman, head trader for Robert W. Baird & Co. in Milwaukee. "There's a sense that that rally has started and people are jumping on board."
Meat processor Hormel Foods Corp.'s fourth-quarter earnings rose 17 percent due to a strong turkey market and improved production. But the maker of Spam said the outlook for the second half of 2006 is unclear and Merrill Lynch cut its rating on the company, saying it will be difficult for next year's results to beat 2005. Hormel fell $2.28 to $32.74.