A jump in holiday retail sales pushes stocks higher Thursday. Major retailers reported sales in November that were stronger than analysts expected. Increased spending during the holiday season would be a strong signal that consumers are feeling more confident.
Dow Climbs 107, Nasdaq Adds On 30
NEW YORK (AP) — Strong retail sales and a healthy reading on the housing market helped stocks start December with a two-day winning streak.
The Dow Jones industrial average rose 106 points. Combined with a 249-point gain Wednesday, the Dow has had its best two-day run since July 7-8.
Major retailers reported sales in November that were stronger than analysts expected. Increased spending during the holiday season would be a strong signal that consumers are feeling more confident.
“Any sign that the consumer is doing better means that the economy will be doing better,” said Drew Matus, a senior economist at UBS.
Costco Wholesale Corp., Target Corp. and Limited Brands Inc. all beat Wall Street sales forecasts. Teen retailer Abercrombie & Fitch Co. jumped 11 percent after reporting that its sales soared 32 percent.
“The consumer is strong and month after month retailing has been very strong,” said Ryan Detrick, the chief technical strategist at Schaeffer’s Investment Research. “If you take a step back it’s clear that the U.S. economy continues to slowly expand.”
The National Association of Realtors said the number of people who signed contracts to buy homes jumped 10.4 percent in October. Economists expected a slight decline. Home builder KB Home rose by 4.5 percent.
The Dow rose 106.63, or 1 percent, to close at 11,362.41 The Dow jumped 2.3 percent Wednesday, its biggest gain since Sept. 1, after a report showed that private employers were adding jobs.
The broader Standard & Poor’s 500 index rose 15.46, or 1.3 percent, to 1,221.53. The Nasdaq composite index rose 29.92, or 1.2 percent, to 2,579.35.
Rising shares outpaced falling ones more than two to one on the New York Stock Exchange. Volume was 1.1 billion shares.
The rise in both retail sales and existing home sales overshadowed an unexpected rise in new claims for unemployment benefits. The Labor Department said first-time unemployment claims rose to 436,000 last week.
Traders found a silver lining in the report, however: the average number of new unemployment claims over the past month fell to a two-year low, signaling that the job market may be improving.
Shares rose overseas after the European Central Bank said it will keep its benchmark interest rate at a record low 1 percent. Investors had hoped that bank would announce more purchases of bonds issued by struggling European countries including Ireland, Italy and Spain.
The Euro Stoxx 50 index, which tracks blue chip companies in countries that use the euro, rose 1.5 percent.
The dollar fell 0.5 percent against an index of six currencies.