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Investors look past Greece worries to retail sales
Source: Agencies |
April 9, 2010, Friday
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THE U.S. stock market recovered from an early slide after an increase in retail sales overshadowed concerns about Greece's debt problems and the job market.
The Dow Jones industrial average finished with a gain of 30 points after being down 53 points. Broader indexes also rose.
The market turned higher around midday after sales gains at the nation's major retailers raised expectations for the economy as well as the corporate earnings reports that start to arrive next week.
Improved weather and an early Easter lifted sales at stores open at least a year by 9 percent, based on results from 31 retailers compiled by the International Council of Shopping Centers.
The stock market began the day lower following drops overseas. Greece's borrowing costs rose to a record level Thursday, signaling that a rescue plan from other European countries and the International Monetary Fund might not be enough to prevent a default.
Investors are concerned that losses on Greek debt would further undermine the euro and trip up a rebound in the global economy. The country's budget deficit has been one of the few drags on stock markets around the world so far in 2010.
A disappointing report on initial jobless claims added to the downbeat mood early in the day. The Labor Department said initial claims for jobless benefits rose unexpectedly last week, jumping 18,000 to a seasonally adjusted 460,000. Economists polled by Thomson Reuters had forecast a drop.
Last week, the government said that employers added 162,000 jobs in March, the most in three years.
Tim Speiss, chairman of Personal Wealth Advisors practice at Eisner LLP in New York, said the interest among some buyers in pouncing on drops in the market is likely to continue.
"I don't believe at all that we're going to have any kind of correction," he said. A correction refers to a drop of at least 10 percent from a peak. There have been five drops of 5 to 8 percent since major stock indexes hit 12-year lows 13 months ago but none have been more than 10 percent.
The Dow rose 29.55, or 0.3 percent, to 10,927.07. The Standard & Poor's 500 index rose 3.99, or 0.3 percent, to 1,186.44, while the Nasdaq composite index rose 5.65, or 0.2 percent, to 2,436.81.
Advancing stocks narrowly outpaced those that fell on the New York Stock Exchange, where volume came to 1 billion shares, compared with 1.2 billion Wednesday.
Stocks retreated in recent days after the Dow flirted with 11,000 on Monday and Tuesday for the first time in 18 months.
Bond prices were little changed. The yield on the benchmark 10-year Treasury note rose to 3.89 percent from 3.87 percent late Wednesday.
The 10-year yield fell sharply Wednesday after an auction for the notes was welcomed with strong demand from investors. Yields had been rising steadily in recent weeks heading into the auction on concerns about oversupply and continued signs of economic growth. A $13 billion auction in 30-year bonds Thursday met expectations.
Sales reports from retailers showed consumers are beginning to return to stores.
Target Corp. and TJX Cos., the owner of T.J. Maxx, Marshalls and other discount stores, increased their first-quarter earnings forecasts following strong sales in March. Macy's Inc. posted March sales that topped analysts' expectations.
Target rose US$1.63, or 3 percent, to US$55.64, while TJX rose 20 cents to US$44.82. Macy's rose 19 cents to US$22.65.
The Dow had its worst day since late February on Wednesday, falling 72 points. Losses accelerated late in the day after the Federal Reserve said consumer borrowing fell unexpectedly in February. The retreat came after major indexes had been on a steady climb. The S&P 500 hit an 18-month high on Tuesday and had risen 12.6 percent in the past two months.
Gold and oil fell as the dollar rose.
Crude oil fell 49 cents to US$85.39 per barrel on the New York Mercantile Exchange.
The Russell 2000 index of smaller companies rose 0.18, or less than 0.1 percent, to 699.64.
The Dow Jones industrial average finished with a gain of 30 points after being down 53 points. Broader indexes also rose.
The market turned higher around midday after sales gains at the nation's major retailers raised expectations for the economy as well as the corporate earnings reports that start to arrive next week.
Improved weather and an early Easter lifted sales at stores open at least a year by 9 percent, based on results from 31 retailers compiled by the International Council of Shopping Centers.
The stock market began the day lower following drops overseas. Greece's borrowing costs rose to a record level Thursday, signaling that a rescue plan from other European countries and the International Monetary Fund might not be enough to prevent a default.
Investors are concerned that losses on Greek debt would further undermine the euro and trip up a rebound in the global economy. The country's budget deficit has been one of the few drags on stock markets around the world so far in 2010.
A disappointing report on initial jobless claims added to the downbeat mood early in the day. The Labor Department said initial claims for jobless benefits rose unexpectedly last week, jumping 18,000 to a seasonally adjusted 460,000. Economists polled by Thomson Reuters had forecast a drop.
Last week, the government said that employers added 162,000 jobs in March, the most in three years.
Tim Speiss, chairman of Personal Wealth Advisors practice at Eisner LLP in New York, said the interest among some buyers in pouncing on drops in the market is likely to continue.
"I don't believe at all that we're going to have any kind of correction," he said. A correction refers to a drop of at least 10 percent from a peak. There have been five drops of 5 to 8 percent since major stock indexes hit 12-year lows 13 months ago but none have been more than 10 percent.
The Dow rose 29.55, or 0.3 percent, to 10,927.07. The Standard & Poor's 500 index rose 3.99, or 0.3 percent, to 1,186.44, while the Nasdaq composite index rose 5.65, or 0.2 percent, to 2,436.81.
Advancing stocks narrowly outpaced those that fell on the New York Stock Exchange, where volume came to 1 billion shares, compared with 1.2 billion Wednesday.
Stocks retreated in recent days after the Dow flirted with 11,000 on Monday and Tuesday for the first time in 18 months.
Bond prices were little changed. The yield on the benchmark 10-year Treasury note rose to 3.89 percent from 3.87 percent late Wednesday.
The 10-year yield fell sharply Wednesday after an auction for the notes was welcomed with strong demand from investors. Yields had been rising steadily in recent weeks heading into the auction on concerns about oversupply and continued signs of economic growth. A $13 billion auction in 30-year bonds Thursday met expectations.
Sales reports from retailers showed consumers are beginning to return to stores.
Target Corp. and TJX Cos., the owner of T.J. Maxx, Marshalls and other discount stores, increased their first-quarter earnings forecasts following strong sales in March. Macy's Inc. posted March sales that topped analysts' expectations.
Target rose US$1.63, or 3 percent, to US$55.64, while TJX rose 20 cents to US$44.82. Macy's rose 19 cents to US$22.65.
The Dow had its worst day since late February on Wednesday, falling 72 points. Losses accelerated late in the day after the Federal Reserve said consumer borrowing fell unexpectedly in February. The retreat came after major indexes had been on a steady climb. The S&P 500 hit an 18-month high on Tuesday and had risen 12.6 percent in the past two months.
Gold and oil fell as the dollar rose.
Crude oil fell 49 cents to US$85.39 per barrel on the New York Mercantile Exchange.
The Russell 2000 index of smaller companies rose 0.18, or less than 0.1 percent, to 699.64.
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