U.S. stocks rebounded from a selloff in energy shares that broadened to the rest of the market Wednesday, as better-than-forecast data on retail sales and unemployment boosted confidence in the economy.
Urban Outfitters Inc. gained the most in the Standard & Poor's 500 Index as retailers rallied 1.9 percent as a group. Exxon Mobil Corp. and Diamond Offshore Drilling Inc. added more than 2.2 percent as energy companies recovered from yesterday's losses.
The Standard & Poor's 500 Index added 1.3 percent to 2,052.45 at 11:18 a.m. in New York, the biggest advance since October. The Dow Jones Industrial Average climbed 193.25 points, or 1.1 percent, to 17,726.40. Trading in S&P 500 companies was 9.9 percent above the 30-day average for this time of the day.
"When you see a big decline like we did yesterday we're poised for a little bit of a bounce back and retail sales are helping," Larry Peruzzi, the Boston-based director of international trading at Cabrera Capital Markets LLC, said by phone. "Globally, we're still one of the bright spots. Retail sales are always an indication that consumers are feeling good."
The S&P 500 slid the most in seven weeks yesterday as a collapse in oil prices rippled through the financial markets, sending all 10 industry groups in the benchmark equity gauge down at least 1 percent. The Chicago Board Options Exchange Volatility Index, the measure of options prices known as the VIX, slid 12 percent to 16.40 today after spiking 24 percent yesterday.
Oil fluctuated near a five-year low, after yesterday plunging. The rout caused concern over the strength of the global economy, as the Organization of Petroleum Exporting Countries cut its forecast for how much crude it will need to provide in 2015 to the lowest in 12 years.
Investors are gauging economic data before the Federal Reserve's policy meeting next week.
Retail sales in the U.S. rose the most in eight months as shoppers benefited from an improving job market and cheaper fuel. The 0.7 percent gain in purchases matched the highest estimate of economists surveyed by Bloomberg and followed a 0.5 percent advance in October that was larger than previously reported, Commerce Department figures showed.
Jobless claims decreased by 3,000 to 294,000 in the week ended Dec. 6, a Labor Department report showed. The median forecast in a Bloomberg survey of economists called for first- time applications to hold at the prior week's 297,000. Claims have been below 300,000 for 12 of the past 13 weeks.
The S&P 500 will continue to climb on the back of a solid U.S. economy paired with low inflation and a boost to consumers from lower oil prices, according to JPMorgan Chase & Co. The benchmark index will rise to 2,250 in 2015, implying a 9.6 percent advance from yesterday's close, head strategist Dubravko Lakos-Bujas wrote in a note today.
All of the 10 main groups in the S&P 500 rallied at least 0.8 percent today, with energy and technology shares pacing gains.
Urban Outfitters surged 11 percent to $33.43, leading a surge among retailer stocks.
Staples Inc. advanced 9.5 percent to $16.22. Starboard Value LP, the activist investor that successfully pushed for the merger of Office Depot Inc. and OfficeMax Inc. last year, disclosed a 5.1 percent stake in the company.
Keurig Green Mountain Inc. added 1 percent to $139.67 after renewing a partnership with Caribou Coffee Co. with a 10-year agreement for manufacturing, marketing, distribution and sale of Caribou in Keurig's hot brewing system.
Diamond Offshore climbed 7.5 percent to $35.29. Exxon Mobil added 3.1 percent to $91.43 after losing 3 percent yesterday.
Energy stocks declined 3.1 percent yesterday as oil fell to a five-year low and the Organization of Petroleum Exporting Countries said global demand for crude will drop next year by about 300,000 barrels a day to 28.9 million, the least since 2003.