Stocks End 3rd Week of Gains With Rally
Wall Street closed its third straight winning week with another rally Friday as a retail sales report and a consumer sentiment reading showed Americans were growing more confident about the economy.
The latest Commerce Department report said retail sales rose 0.2% in October, a respectable gain considering that automobile sales dropped 2.2%. Without auto sales, retail sales would have been up a healthy 0.9%, although a lack of spending on such big-ticket items worried some investors.
Stabilizing crude oil futures once again helped stocks. A barrel of light crude settled at $47.32, down 10 cents, in New York trading.
“The retail report, along with oil and the elections and the economy, they’ve all contributed to a very nice run we’ve had and should continue to have through the end of the year,” said Hans Olsen, managing director and chief investment officer at Bingham Legg Advisers in Boston.
“But oil, in particular, could still be a problem. It’s been driven by demand, not by problems with supply, and a big spike in demand or a big supply problem on top of that could be a big shock to the system.”
The Dow Jones industrial average rose 69.17 points, or 0.7%, to 10,539.01, its best close since April 6.
Broader stock indicators also advanced. The Standard & Poor’s 500 index was up 10.69 points, or 0.9%, at 1,184.17. Nasdaq gained 24.07 points, or 1.8%, to 2,085.34.
Advancing issues outnumbered decliners by more than 5 to 2 on the New York Stock Exchange.
Wall Street finished its third straight week in positive territory thanks to broad buying across all sectors.
Although the postelection rally continued, the exuberance of investors in the last two weeks was replaced by more caution, though lower oil prices and a reassuring statement from the Federal Reserve helped fuel steady buying.
For the week, the Dow gained 1.5%, the S&P; 500 rose 1.5% and Nasdaq climbed 2.3%.
Among Friday’s market highlights:
* The Commerce Department report boosted retail stocks. Discount retailer Target added $1.25 to $52.02 and Wal-Mart Stores climbed 23 cents to $56.85. Shares of major automakers were mixed. Ford lost 2 cents to $14.23, and General Motors was up 31 cents at $40.21.
* Dell added $3.19 to $40.44. The company reported strong earnings after the market closed Thursday, helping lift shares of other technology stocks. Advanced Micro Devices increased $2.43 to $21.02 and Intel added 52 cents to $23.69.
* Pixar Animation Studios, maker of the hit movie “The Incredibles,” surged $6.60 to $86.54 a day after beating Wall Street’s profit forecasts on the strength of its home video sales.
* Blockbuster rose for a second day, gaining 58 cents to $8.78. The largest U.S. video store chain made an unsolicited $700-million bid to buy Hollywood Entertainment this week as competition increased from retailers and Internet-based rental services. Hollywood Entertainment rose 76 cents to $11.69 and was lifted to “peer perform” from “underperform” by an analyst at Bear, Stearns & Co.
* U.S. Treasury yields fell, with the benchmark 10-year note falling to 4.18%, down from 4.24% on Wednesday (bond markets were closed Thursday in recognition of Veterans Day). Traders said yields fell on speculation that slower economic growth in Japan and Europe would spill over to the U.S.