SALON

Wednesday, Mar 13, 2013 5:15 PM UTC

Stocks little changed despite strong retail sales

By

Topics: From the Wires,

Stocks little changed despite strong retail salesTraders work on the floor of the New York Stock Exchange Wednesday, March 13, 2013. Stocks were little changed in early trading on Wall Street after a report showed that retail sales rose more than forecast in February. (AP Photo/Richard Drew)(Credit: AP)

NEW YORK (AP) — Stocks were little changed on Wall Street Wednesday despite an unexpectedly strong increase in U.S. consumer spending last month.

The Dow Jones industrial average overcame an early loss and was up 14 points, or 0.1 percent, to 14,465 as of 1:01 p.m. EDT. The index rose for an eighth straight day Tuesday, its longest streak of advances in more than two years.

Americans spent at the fastest pace in five months in February, boosting retail spending 1.1 percent compared with January, the Commerce Department reported Wednesday. Economists had forecast a rise of just 0.2 percent, according to data provider FactSet.

“As the market rises, so do expectations,” said Bill Stone, chief investment strategist at PNC Wealth Management. “So, even if you get good numbers you don’t necessarily get the market to go up.”

The solid increase in retail sales is encouraging for the economy because it shows that Americans kept spending despite a payroll tax increase that has lowered take-home pay this year for most workers. Consumer spending drives about 70 percent of the U.S. economy.

The Standard & Poor’s 500 index was up two points, or 0.1 percent, at 1,554. The Nasdaq composite rose two points, or 0.1 percent, to 3,244.

Stocks of retail companies rose after the sales report. Kohl’s rose $1.20 to $48.53 and Best Buy gained 71 cents to $21.01.

If the Dow closes higher, it would match the longest streak of advances since May 1996, according to Ryan Detrick, an analyst at Schaeffer’s Investment Research. The Dow is up 10.2 percent this year and has closed at record highs over the previous six days.

Demand for stocks has been propelled this year by optimism that the housing market is recovering and that companies have started to hire. Strong company earnings and ongoing stimulus from the Federal Reserve are also helping make stocks more attractive.

Brian Gendreau, a strategist at Cetera Financial Group says that even if markets dip in coming weeks, the trend of rising company earnings is likely to push stocks higher in the longer term. Company earnings grew by 7.7 percent in the fourth quarter, rising for a third straight period, according to data from S&P Capital IQ.

“Earnings growth has been quite strong, corporations have found a way to make money,” said Gendreau. “New products, new markets, cost savings. I don’t believe that is going to stop any time soon.”

The broader S&P 500 index has gained 9 percent in 2013 and is within less than a percentage point of its record close of 1,565.15 set in October 2007.

Stocks in Europe were mixed. Most markets edged lower after industrial production in the countries using the euro unexpectedly fell by 0.4 percent in January. Economists had expected it to rise by 0.1 percent, according to FactSet.

The yield on the 10-year Treasury note rose to 2.05 percent from 2.02 percent.

Among stocks making big moves;

— Spectrum Pharmaceuticals plunged $4.37, or 35 percent, to $8.06 after the pharmaceutical company said sales of its drug Fusilev could fall by more than half this year.

— Dole dropped 95 cents to $10.78 after the company’s fourth-quarter results fell short of analysts’ expectations. The fruit company cited lower banana prices in North America.

— Silver Spring Networks, a technology company based in Redwood City, California, surged $4.75, or 28 percent, to $21.74 on its stock market debut.

—Express fell $1.63 to $17.36 after the clothes retailer’s earnings report disappointed investors. Michael Weiss, the company’s CEO and chairman, told analysts on a conference call that consumer numbers were “down noticeably” compared to last year.

More By Steve Rothwell.

Next Article

Related Stories

More Related Stories

Featured Slide Shows

The week in 10 pics

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11
  • Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
    Credit: AP/LM Otero

  • Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
    Credit: AP/Matt Rourke

  • A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
    Credit: AP/Jenny Aicher

  • Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
    Credit: AP/Molly Riley

  • Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
    Credit: AP/J. Scott Applewhite

  • Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
    Credit: AP/Carolyn Kaster

  • O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
    Credit: AP/Las Vegas Review-Journal/Jeff Scheid

  • Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
    Credit: AP/NASA/Chris Hadfield

  • When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
    Credit: AP/Jacquelyn Martin

  • A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
    Credit: AP/The Duluth News-Tribune/Clint Austin

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11

Related Videos

Comments

 0 Comments

Comment Preview

Your name will appear as username

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>

follow salon

Most Read

Popular on Reddit

links from salon.com

From Around the Web

Presented by Scribol
listener_new_rect The Listener: So long, Sookie Stackhouse

Recommendations