January retail sales push market higher
NEW YORK » Wall Street moved sharply higher yesterday after the Commerce Department reported an unexpected increase in retail sales last month and eased some concerns about consumers' willingness to spend despite economic uncertainty.
The 0.3 percent rise in January retail sales, which followed a drop during December, alleviated some of the market's worries that consumers were retrenching because of rising fuel prices, a faltering real estate sector and a choppy stock market. Analysts had expected a 0.3 percent decline in January sales.
However, another report from the department showed that U.S. business inventories grew a little more than expected in December. The data could be a sign of an involuntary buildup of unsold goods on store shelves amid the economic slowdown.
The inventories report was not enough to offset optimism during the session.
"So far this week there has been a positive bias, but I think what you're seeing is people taking a very cautious approach," said Scott Fullman, director of investment strategy at I.A. Englander & Co.
The Dow rose 178.83, or 1.45 percent, to 12,552.24. The blue chip index finished at its highs of the session.
Broader indexes also moved higher. The Standard & Poor's 500 index added 18.35, or 1.36 percent, to 1,367.21, and the Nasdaq composite rose 53.89, or 2.32 percent, to 2,373.93. The Russell 2000 index of smaller companies rose 16.45, or 2.33 percent, to 721.93.
Advancing issues led decliners by a 2 to 1 margin on the New York Stock Exchange, where consolidated volume came to 3.64 billion shares, down from 3.92 billion shares on Tuesday.
Bond prices dipped, with the yield on the benchmark 10-year Treasury note, which moves opposite its price, at 3.73 percent from 3.66 percent on Tuesday.
The dollar was mixed against other major currencies.
Light, sweet crude oil rose 49 cents to settle at $93.27 on the New York Mercantile Exchange. The International Energy Agency cut its oil demand forecasts for this year due to the weakening U.S. economy.
Michael Strauss, chief economist at CommonFund, said he'll be listening to see if Federal Reserve Chairman Ben Bernanke makes any projections about the housing market. Bernanke is scheduled to provide testimony before a Senate committee on banking and housing this morning.
"I think Bernanke will be grilled more on housing, and one of the things he'll focus on is that the housing sector has had a much bigger impact on the economy than the Fed anticipated it would have," Strauss said.
In corporate news, Coca-Cola Co. said its fourth-quarter earnings jumped 79 percent amid a 24 percent increase in revenue. But Coke fell 53 cents to $59.39.
Also, the state oil company of Venezuela said it has halted sales of crude to Exxon Mobil Corp. in response to the U.S. company's drive to use the courts to seize billions of dollars in Venezuelan assets. The oil company rose $1.11 cents to $85.49.