Signs of Retail Strength Lift Stocks
Stocks gained during a shortened trading session Friday as traders snapped up retail stocks, heartened by signs that the year-end shopping season has kicked off to a strong start.
Discount retailer Wal-Mart Stores and department store operator Federated Department Stores helped boost broad-market indexes. Deep discounting has helped to lure shoppers into malls despite large job losses and the economic slump after the Sept.11 terrorist attacks.
Traders also said they were optimistic the war in Afghanistan may end soon, after reports that some Taliban troops are close to a surrender.
“It looks like the war is over and traders are getting a jump on it before everyone comes in for work on Monday,” said Mace Blicksilver, a money manager for Marblehead Asset Management. “Retailers are doing well and the mood is better.”
The Dow Jones industrial average rose 125.03 points, or 1.3%, to 9,959.71, while the broader Standard & Poor’s 500 index gained 13.31 points, or 1.2%, to 1,150.34. The technology-laden Nasdaq composite index advanced 28.15 points, or 1.5%, to 1,903.20.
Trading was light with the market open for only half the day and many portfolio managers taking the day off after the Thanksgiving holiday on Thursday. Volume was about one-third recent levels on the New York Stock Exchange, where advancers trounced decliners by 3 to 1. Winners led losers by more than 2 to 1 on Nasdaq.
Stocks closed higher for the third consecutive week and the seventh week in the last nine, with the Dow rising 0.9% for the week, the S&P; 500 gaining 1% and the Nasdaq inching up 0.2%.
Hopes for a rebound in the economy and corporate profits sometime next year have helped drive the market higher in recent weeks, pulling it off three-year lows hit after Sept. 11.
“People have begun to look forward and think some of these stocks can recover,” said Rick Meckler, president of investment firm LibertyView.
U.S. consumers mobbed shopping malls on Friday, one of the busiest shopping days of the year, a sign that shoppers were willing to spend.
Discount retailer Wal-Mart gained 68 cents to $55.80, while Federated, parent of department stores Bloomingdale’s and Macy’s, gained $1.10 to $38.21. The S&P; index of department store stocks rose 2.6%.
Among Friday’s highlights:
* The dollar rose to 31/2-month highs against the yen and the euro amid speculation U.S. economic growth will rebound in coming months as Japanese and European economies weaken. The greenback climbed as far as 124.46 yen, its highest level since Aug. 2, before closing at 124.38 yen. It strengthened to 87.37 cents per euro, the strongest level since July 31, before closing at 87.78 cents.
* Beleaguered Enron, which already has plunged to its lowest levels for more than a decade amid worries about its credit standing and fears a proposed rescue by Dynegy could fall through, was the most actively traded NYSE stock for the third consecutive session. Enron fell 30 cents to $4.71. Dynegy rose 64 cents to $40.40.
* The Amex airline index rose 4% as falling oil prices boosted airline stocks. AMR, parent of American Airlines, rose 53 cents to $21 and United parent UAL climbed 78cents to $16.62. Delta gained $1.02 to $29.31, Continental was up $1.64 to $22.35 and Northwest rose 89 cents to $17.66.
* Swedish mobile phone giant Ericsson got a lift after it announced Thursday that it expects fewer rivals in the market for third-generation wireless telephony. It rose 33 cents to $5.55.
* In the latest merger news, U.S. telecommunications services company D&E; Communications said it agreed to buy Conestoga Enterprises for $273.3 million in cash, stock or a combination of both. D&E; slumped $2.45 to $17.60, while Conestoga jumped $5.60 to $29.95.
* General Motors gained $1.45 to $47.69 and Ford rose 75 cents to $17.88 on reports the giant auto makers could reap millions in tax savings if the corporate alternative minimum tax is repealed.
