Stocks rise following jobs report, retail data
NEW YORK » Wall Street surged yesterday as investors looked past a sharp rebound in oil prices and focused on comforting news about the economy - better-than-expected retail sales and a drop in the number of laid-off workers seeking unemployment benefits.
The Dow Jones industrials rose almost 214 points, posting its biggest daily point gain since April 18.
The market got an additional boost from word that Verizon Wireless will acquire Alltel Communications LLC for $5.9 billion in cash and the assumption of $22.2 billion in debt.
Not all of yesterday's news was positive, however. Even though the Labor Department said applications for unemployment benefits declined last week by 18,000 to 357,000, its four-week average rose to a four-month high.
Other worrisome developments included a more than
$5 spike in crude oil prices to almost $128 a barrel, a steep tumble by the dollar against the euro, rising bond yields, a new record high in corn prices, and a Mortgage Bankers Association report showing that nearly 1 percent of mortgages fell into foreclosure between January and March.
Stock investors appeared to be ignoring yesterday's negative signals. Instead they were betting on an economic recovery later in the year.
Alfred E. Goldman, chief market strategist at Wachovia Securities, contends the market is entering a stronger period because of investors' ability to not overreact to some bad news such as rising oil prices and a weak dollar and to focus instead on the retail sales and jobless claims numbers.
"What investors are doing is looking beyond the valley to the peaks ahead," he said. "The big picture is that we're in a market that's transitioning from a bear to a bull."
The Dow rose 213.97, or 1.73 percent, to 12,604.45.
Broader stock indicators also advanced. The Standard & Poor's 500 index rose 26.85, or 1.95 percent, to 1,404.05, and the Nasdaq composite index rose 46.80, or 1.87 percent, to 2,549.94.
The Russell 2000 index of smaller companies rose 19.55, or 2.63 percent, to 763.26.
Advancing issues outnumbered decliners by nearly 3 to 1 on the New York Stock Exchange, where consolidated volume came to 4.18 billion shares from 4.26 billion on Wednesday.
Among retailers reporting solid May results, Wal-Mart Stores Inc. said sales at stores open at least a year rose as consumers sought bargains. Wal-Mart shares rose $2.12, or 3.7 percent, to $59.80.
Subodh Kumar, global investment strategist at Subodh Kumar & Assoc. in Toronto, said the jobs figures and the Verizon Wireless deal offer some investors reassurance about the health of the economy.
"It looks like the U.S. is not in recession but, I would say, tepid growth," Kumar said.
Bond prices fell yesterday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.04 percent from 3.98 percent late Wednesday. Gold prices fell.
The stock market appeared to be shrugging off a sharp rebound in oil prices. Light, sweet crude oil rose $5.49 at $127.79 a barrel on the New York Mercantile Exchange.