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- Here's what's being built next to Chick-fil-A in Cape (1/18/18)1
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- Poultry in motion: 4-H participants take first in nation with barbecue skills (1/13/18)1
- Cape man wins Scratchers lottery top prize (1/12/18)
- 3 mayor candidates in Scott City; former mayor Porch files for council seat (1/18/18)
Retail results give Wall Street a reason to rally
AP Business WriterNEW YORK (AP) -- Relatively solid retail sales figures inspired another rally on Wall Street Wednesday as investors grew more confident about an impending economic recovery. The Dow Jones industrials scored their best close in more than a month and their third triple-digit gain in four sessions.
But analysts still cautioned against too much optimism, noting that investor sentiment remains fragile. Stocks have moved mostly lower in recent weeks, in between occasional short-lived surges, on concerns that prices are still too high given the uncertain prognosis for corporate earnings.
The Dow closed up 125.86, or 1.3 percent, at 9,989.60, according to preliminary calculations, its highest close since Jan. 10. The Dow rose 118 points last Friday, and 140 on Monday.
Broader stock indicators also advanced. The Standard & Poor's 500 index climbed 11.00, nearly 1.0 percent, to 1,118.50, while the Nasdaq composite index gained 24.93, or 1.4 percent, to 1,859.14.
Investors were encouraged by a Commerce Department report showing retail sales rose by a satisfactory 1.2 percent in January, excluding volatile automobile sales. Auto sales fell by 4.3 percent, but that decline was anticipated as zero-percent financing and other incentives waned.
Consumer spending is closely watched because it accounts for two-thirds of the economy.
"The number was much stronger than expected and it's giving people a little bit of optimism that the economy is recovering better than thought," said Todd Clark, head of listed equity trading at Wells Fargo Securities.
The news helped boost retail stocks. Home Depot was up 93 cents at $51.24. Office supplies retailer Office Depot climbed $2.30, or 14 percent, to $18.49 after increasing its estimates for future earnings.
Technology stocks also fared well, helped by a better-than-expected report from Applied Materials. The chip-making equipment company rose $3.22, or 7.2 percent, to $47.93 after announcing a $45 million first-quarter loss Tuesday that beat expectations. The company also said it expects orders in the current quarter to grow 10 percent to 15 percent.
The buying spread to manufacturing and industrial stocks. General Motors rose $2.13 to $51.20, while Boeing gained $1.75 to $44.90. Both are Dow components.
Analysts hesitated to get excited about the market's advance, however, noting that investors remain worried that more companies will reveal accounting improprieties like the ones that preceded Enron's downfall.
Moreover, while the major indexes have recovered much of their recent losses, they are still below where they started the year: The Dow has fallen 0.3 percent, the Nasdaq has lost 4.7 percent and the S&P has fallen 2.6 percent.
Wall Street also remains vulnerable to fears of more terrorist attacks. Stocks pulled back briefly in the morning on news that Los Angeles International Airport terminal had been evacuated after a mysterious package was found. The package was later determined not to be dangerous.
"I'd say the market is leery, not trusting right now," said Ralph Acampora, director of technical research at Prudential Securities. "There's a lot of money on the sidelines right now, but if investors are uncertain, whether about management, Enron or terrorism, it's enough to put a wet blanket on buying."
Also Wednesday, investors bid EMC up 49 cents to $14.49, despite a former employee's allegations that the data storage company improperly recognized revenue. EMC said the claims are false. But Tyco dropped $1.60 to $28.90, after lowering its estimates for the second quarter citing slow electronics businesses and the disruption caused by bookkeeping.
And Wall Street reacted eagerly to the initial public offering of shares of GameStop, the videogame retailing subsidiary of Barnes & Noble. The stock closed at $20.10, after opening for trading at $19.25 per share -- higher than the $18 price set a day earlier.
Advancing issues led decliners nearly 3 to 2 on the New York Stock Exchange. Volume came to nearly 1.20 billion shares, compared with almost 1.10 billion shares Tuesday.
The Russell 2000 index rose 4.32 to 476.33.
Overseas, Japan's Nikkei stock average gained 0.9 percent. In Europe, Germany's DAX index climbed 1.0 percent, Britain's FT-SE 100 advanced 0.4 percent, and France's CAC-40 rose 0.6 percent.
On the Net:
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com