Friday 12th December 2014 |
Text too small? |
Wall Street gained as stronger than anticipated US retail sales bolstered confidence in the strength of the American economy, and corporate profits.
In midday trading in New York, the Dow Jones Industrial Average climbed 1.2 percent, the Standard & Poor’s 500 Index added 1.3 percent, while the Nasdaq Composite Index rose 1.5 percent.
Gains in shares of Exxon Mobil and those of Home Depot, recently up 2.6 percent and 2.4 percent respectively, led the Dow higher. At midday, all stocks on the Dow were trading higher from the previous day.
US retail sales rose a better than expected 0.7 percent in November, following an upwardly revised 0.5 percent in October, according to Commerce Department data.
“The consumer is doing pretty well,” Thomas Simons, an economist at Jefferies in New York, who predicted a 0.5 percent gain in retail sales, told Bloomberg News. “Any money consumers are saving from lower gasoline prices is being deployed elsewhere. The broad based increase in sales is quite encouraging.”
The data helped bolster the outlook for US growth.
"It provides a bit of a boost to fourth quarter growth estimates," Dan Greenhaus, chief strategist at BTIG in New York, told Reuters. "We expect the lower gasoline price boost to continue into next year's first half and with an improving jobs market, GDP should be well supported in coming quarters."
Separately, jobless claims fell by 3,000 to 294,000 in the week ended December 6, a Labor Department report showed.
While US energy stocks including Exxon Mobil rose as investors found value following their recent slump, oil extended its decline and may continue to slide.
"We may see some technical bounces, but it is too soon to speak of a sustainable price recovery," Carsten Fritsch, analyst at Commerzbank, told Reuters. Commerzbank on Thursday downgraded its 2015 Brent price forecast to US$73 a barrel from US$82.
Shares of Staples soared, last up 8.9 percent, after Starboard Value disclosed a 5.1 percent stake in the company. Starboard also lifted its stake in Office Depot to about 10 percent, from 8.6 percent.
In Europe, the Stoxx 600 Index inched lower from the previous close to end the session at 339.31. Earlier in the day, the index had risen as much as 0.3 percent and slid as much as 0.8 percent, according to Bloomberg. France’s CAC 40 Index slipped 0.05 percent, while the UK’s FTSE 100 Index fell 0.6 percent, Germany’s DAX Index gained 0.6 percent.
Greece’s benchmark stock index slumped 7.4 percent, extending its drop to more than 20 percent this week amid concern potential elections could hand control to the Syriza party, which is opposed to the country’s bailout deal from the European Union and the International Monetary Fund.
BusinessDesk.co.nz
No comments yet
Second St John withdrawal of labour takes effect tomorrow with further strikes likely
Sanford Appoints Independent Director
CRP ADVISES CLOSURE OF SHARE OFFER TO EXISTING INVESTOR
Devon Funds Morning Note - 14 August 2024
OCR 5.25% - Monetary restraint tempered as inflation converges on target
Consumers still need due diligence as new deposit takers emerge.
Woolworths strike: staff asked to dress up in Disney costumes for a week on their own dollar
Turners Invests in Quashed Online Insurance Platform
PGW Reports on Challenging Year
Arvida Announces Executive Team Changes