kenny skips dinner this evening:
Stocks Rise as Retail Report Stokes Hopes of Recovery
By THE ASSOCIATED PRESS
Filed at 2:33 p.m. ET
NEW YORK (AP) -- Wall Street moved higher Thursday after a government report showed better-than-expected growth in November retail sales, raising new hopes that the economic recovery is sustainable. The Dow Jones industrial average gained more than 70 points, briefly passing the 10,000 mark.
The acceleration, after two days of losses on the major indexes, suggests investors may be doing some short-term bargain hunting as they look to capture whatever gains they can before the end of the year, analysts said.
``Today's move looks to me like it stems from a buying-the-dip type of mentality, given the fact that the last two days were kind of weak,'' said Brian G. Belski, fundamental market strategist at US Bancorp Piper Jaffray.
In afternoon trading, the Dow Jones industrial average was up 74.96, or 0.8 percent, at 9,996.82. Belski and other analysts did not place great importance on the Dow's proximity to 10,000 -- which the index briefly breached Tuesday -- saying it was more of a curiosity than anything else.
The broader gauges also were higher. The Nasdaq composite index was up 31.32, or 1.6 percent, at 1,935.97. The Standard & Poor's 500 index was up 11.37, or 1.1 percent, at 1,070.42.
The Commerce Department reported a 0.9 percent rise in November retail sales as the nation's shoppers descended on stores with a fresh burst of energy. It was the largest advance since August, and beat the expectations of economists, who had forecast a 0.7 percent rise.
Separately, the Labor Department said new claims for unemployment benefits rose last week by a seasonally adjusted 13,000 to 378,000, suggesting the pace of layoffs is leveling off.
The new data comes just days after the Federal Reserve decided to keep rates low for now, in the hopes it will motivate consumers and businesses to boost spending and investment, and lift economic growth.
As the economy continues to show signs of improvement, analysts say investors are moving out of the tech and small-cap stocks that have led the recovery since March and shifting their profits into larger blue-chip companies. The economic news, while positive on balance, may be temporarily taking a back seat to this rotation, said Alexander Paris, economist and market analyst for Chicago-based Barrington Research.
``People have been sitting right on the fence, wondering, 'Should I take profits now and lock in performance?' But they don't want to miss the next leg up,'' Paris said. ``So they may be switching to these companies that have less downside risk.''
Still, stocks across all sectors remain extremely vulnerable to negative news, with cautious investors quickly dumping shares when there are signs of trouble.
Goodyear Tire & Rubber Co. declined 68 cents to $6.68 after the company delayed filing its 2002 10-K because of accounting problems in Europe. The filing was being closely watched by union officials because Goodyear had promised to strengthen its balance sheet without laying off workers and closing plants, and had planned to raise cash through debt and other financing. The filing delay will likely postpone those efforts.
IKON Office Solutions Inc. was up $2.28 at $11.08 after it agreed to sell certain assets and liabilities of its IOS Capital unit to GE Vendor Financial Services for about $1.5 billion. General Electric Corp. was up 56 cents at $30.28.
Wal-Mart Stores Inc. was up 4 cents at $52.99 on reports that it has approached British supermarket group Safeway PLC with an offer to buy part of its business for nearly $2 billion. The move is aimed at foiling a rival offer for Britain's No. 4 grocer.
Unisys Corp. was down $1.40 at $14.50 after company executives said they were expecting pension expenses of $80 to $90 million next year. Though the firm reiterated its guidance, analysts said the expenses were sure to hurt its bottom line in 2004.
Advancers outpaced decliners almost 2 to 1 on the New York Stock Exchange. Volume was at 883.29 million shares, compared with 864.24 million shares traded at the same point Wednesday.
The Russell 2000 index, which tracks smaller company stocks, was up 11.68, or 2.2 percent, at 540.17.
Overseas, Japan's Nikkei stock average finished 1.7 percent higher Thursday. In Europe, France's CAC-40 rose 0.8 percent, Britain's FTSE 100 lost 0.1 percent and Germany's DAX index gained 1.0 percent.
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