Strong retail stats boost Wall Street
US stocks rose yesterday, snapping a four-day losing streak, after stronger-than-expected retail sales data eased concerns about the economy before today’s important jobs data.
After sharp falls this week, the broad S&P 500 index finished above 1,000 as retailers’ August sales were joined by a survey showing improvement in the US services sector.
Financials and retail stocks were among the day’s leaders, with Bank of America up 3.5 per cent to $16.84, and Citigroup up 4.8 percent at $4.77. The S&P financial sector index was up 2.3 per cent.
“It’s the belief the economy is in the recovery stage. What’s rallying today are things associated with economic growth,” said Owen Fitzpatrick, head of the US equity group at Deutsche Bank Private Wealth Management.
“Granted, we’re due for a pause, but the reality is we are in an economic recovery.”
The Dow Jones industrial average was up 63.94 points, or 0.69 per cent, at 9,344.61. The Standard & Poor’s 500 Index was up 8.49 points, or 0.85 per cent, at 1,003.24. The Nasdaq Composite Index was up 16.13 points, or 0.82 per cent, at 1,983.20. The S&P is up about 48 per cent from its 12-year closing low on March 9.
The Labor Department is due to release its non-farm payrolls figures this morning, which should shed light on the outlook for the economic recovery.
The payrolls report, accompanied by the US unemployment rate for August, will come before a long Labor Day holiday weekend. US financial markets will be closed on Monday.
Among retailers posting higher-than-expected sales in August were Costco Wholesale and Target.
Costco’s shares, which were upgraded by JPMorgan, climbed 8.6 per cent to $55, while Target gained 1.7 per cent to $47.07. The S&P retail index rose 2.03 per cent.
Gold prices climbed to their highest since late February, with spot gold hitting a peak of $997.20 an ounce before paring gains to $992.25 at the end of the day in New York. Mining company shares rose, with Newmont Mining up 4.5 per cent to $45.77 and Freeport-McMoRan Copper & Gold 4.34 per cent higher at $64.48.