US STOCKS rose yesterday, erasing much of the previous session’s steep drop, as a strong December retail sales reading eased concerns that economic growth might be slowing.
Google rose 2.4 per cent to $1,149.40, giving a large boost to the outperforming Nasdaq, a day after the company announced plans to acquire Nest Labs. The $3.2bn deal will give Google a promising line of products and a prized design team.
Core US retail sales increased 0.7 per cent in December from the prior month, flying past the 0.3 per cent gain economists had expected. Fourth-quarter economic growth prospects were further boosted by a report showing retail inventories, excluding autos, increased 0.6 per cent in November.
The data followed Friday’s payroll report, which showed job growth for December that was sharply below expectations.
“Retail sales numbers for December sort of calmed everyone down,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services.
“Numbers indicate the economy is most likely moving forward at a nice pace despite an errant jobs number last Friday.”
The Dow Jones industrial average rose 115.92 points or 0.71 per cent, to 16,373.86. The S&P 500 gained 19.68 points or 1.08 per cent, to 1,838.88, and the Nasdaq Composite added 69.712 points, or 1.69 per cent, to 4,183.016.
The gains came a day after the S&P 500 posted its largest drop in two months.