Retail sales propel Dow to yet another record
The biggest increase in retail sales in five months helped give the stock market its best weekly advance since September and bring the Standard & Poor’s 500 index to its highest level since November 2000.
Bond yields rose on concern that a stronger-than-expected economy could persuade the Federal Reserve to keep interest rates unchanged. Bond investors have been hoping the Fed will lower rates in the near future.
Some of Friday’s fluctuations were probably attributable to investors’ adjusting their positions before a three-day weekend, with the markets closed Monday for Martin Luther King Jr. Day.
“You’ve had a pretty good week, and people always tend to even up positions on a Friday -- especially before a holiday,” said Alexander Paris, an economist and market analyst for Chicago-based Barrington Research.
The Dow rose 41.10 points, or 0.3%, to 12,556.08. Friday marked the index’s 24th record close since the start of October.
Broader stock indicators advanced. The Standard & Poor’s 500 index rose 6.91 points, or 0.5%, to 1,430.73, and the Nasdaq composite rose 17.97 points, or 0.7%, to 2,502.82.
For the week, stocks advanced modestly and managed to push the indexes into positive territory for the new year. The Dow was up 1.3%, the S&P; 500 advanced 1.5% and the Nasdaq picked up 2.8%.
The bond market, which has been pricing in the potential of a rate cut sometime in the first half of the year, was rattled by the economic reports Friday. The yield on the benchmark 10-year Treasury note rose to 4.77%, from 4.74% on Thursday.
The dollar was mixed against other major currencies. Gold futures rose $13.90 an ounce to $625.50.
“The mood isn’t negative,” said Brian Williamson, an equity trader at Boston Co. Asset Management, a subsidiary of Mellon Financial.
“You take the economic news as it comes. Things are changing so rapidly, and there’s so much information right now, but you react and then look ahead. That’s what the market is doing.”
Oil prices, which touched fresh 19-month lows during the session, traded erratically as traders weighed speculation that the Organization of the Petroleum Exporting Countries might consider an emergency meeting to cut production.
Crude oil futures rose $1.11 a barrel to $52.99 in New York trading. Despite the advance, oil is down 13% this year.
* Investors pushed oil stocks higher on belief that a production cut could help anchor profits for the sector.
ConocoPhillips rose $2.01 to $63.83. Exxon Mobil picked up $1.68, rising to $72.66.
* Retail stocks rose after the Commerce Department said sales climbed 0.9% in December, capping the strongest back-to-back gains in almost a year. Economists had expected a 0.7% increase.
Sears, the largest U.S. department-store chain, added $3.30 to $177.78. Dollar General, a discount retailer, gained 49 cents to $17.49. Amazon.com, the world’s biggest Internet merchant, added 80 cents to $38.20.
* Technology stocks, which have been among the market’s biggest gainers this year, extended their advance despite a warning from Advanced Micro Devices that fourth-quarter results would be lower than expected.
AMD plunged $1.92, or 9.5%, to $18.26.
Business software maker SAP’s warning that quarterly profit and revenue would fall short of expectations caused a round of analyst downgrades. But the stock stayed in positive territory, rising $1.52, or 3.1%, to $50.02.
* Apple backed off an all-time high reached earlier in the week after it unveiled plans to roll out its iPhone this year. Apple shares fell $1.18 to $94.62 after Cisco Systems filed a trademark infringement lawsuit.
Cisco shares rose 23 cents to $28.92.
* Cablevision Systems fell after the family that founded the company raised its buyout bid in what it called the “best and final offer.” Investors sent the stock down $1.21, or 4.1%, to $28.39 as it appeared that a more-lucrative offer was unlikely.
