Stocks resume advance following 1-day hiatus
NEW YORK » Stocks resumed their advance yesterday following a one-day hiatus as investors looked past higher oil prices and a somewhat cloudy picture for retail sales.
The Dow Jones industrial average has shown gains in nine of the last 10 sessions.
Retailers' reports on sales at stores open at least a year, an important measure known as same-stores sales, initially concerned some investors yesterday because of scattered warnings that sales would be light during April.
Investors seemed to shake off those concerns as well as unease about inflation and oil prices as they awaited a deluge of earnings reports set to begin in earnest next week.
"I think investors are trying to figure out what the next Fed move is. We're really at the point of chicken -- where the Fed is trying to ward off inflation without submarining the economy," said Mark Coffelt, portfolio manager at Empiric Funds, referring to when the Federal Reserve might adjust short-term interest rates.
After a back-and-forth morning, the Dow rose 68.34, or 0.55 percent, to 12,552.96.
Broader stock indicators also advanced. The Standard & Poor's 500 index rose 8.93, or 0.62 percent, to 1,447.80, and the Nasdaq composite index picked up 21.01, or 0.85 percent, to finish at 2,480.32.
The Russell 2000 index of smaller companies rose 6.81, or 0.84 percent, to 815.05.
Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where volume came to 1.49 billion shares compared with 1.57 billion traded Wednesday.
Bonds showed little overall movement as stocks took the lead. The yield on the benchmark 10-year Treasury note was unchanged at 4.74 percent from late Wednesday after being lower earlier in the session. The dollar was mixed against other major currencies, while gold prices fell.
Higher oil prices have weighed on stocks in recent sessions. On Wednesday, weekly government figures showed a larger-than-expected decline in gasoline stockpiles. Light, sweet crude settled up $1.84 at $63.85 per barrel yesterday on the New York Mercantile Exchange. Often, rising oil prices trigger concerns about inflation.
The decline in stocks Wednesday snapped an eight-session winning streak for the Dow industrials -- the longest string of gains for the blue chip average since 2003.
The climb in stocks yesterday follows a pullback Wednesday that began after minutes from the Federal Reserve's last meeting showed the central bank remains concerned enough about inflation that it won't rule out an increase in interest rates.
Richard Hoyt, market strategist at KDV Wealth Management, contends the recent run-up in stocks follows general investor enthusiasm over upward revisions to figures on gross domestic product, the broadest measure of the economy.
"You've got consumption which is 70 percent of GDP and is fairly strong due to an improving job market," he said.
News from retailers stirred some concern about how well sales will hold. While Wal-Mart Stores Inc. said same-store sales for the March period rose 4 percent -- well above the 1.6 percent Wall Street expected -- the company warned April will prove a difficult month. Wal-Mart fell 1 cent to $47.26.