Stocks higher after retail sales improve
Monday, October 15, 2012
Stocks rose on Monday after a strong gain in retail spending suggested that consumers could be getting more confident about the economy. Bank stocks rose broadly after Citigroup delivered a strong earnings report.
The Dow Jones industrial average rose 95.38 points to close at 13,424.23, its biggest gain since Sept. 13.
The Standard & Poor’s 500 index was up 11.54 points at 1,440.13 and the Nasdaq composite index rose 20.07 points to 3,064.18.
Companies that rely on consumer spending, like Lowe’s, TJX Cos. and Yum Brands, rose after the government reported that retail sales rose 1.1 percent in the U.S. last month. The Commerce Department also revised August growth up to 1.2 percent, marking the two largest gains since October 2010.
Sales rose in most major categories. Electronics and appliances jumped 4.5 percent with help from the new iPhone. Sales at auto dealers increased 1.3 percent. Building materials and garden supplies, furniture and clothing sales all gained, too.
“The retail sales numbers tell us that the economy in general, and consumer spending in particular, probably did better than most expected in the third quarter,” said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors.
Citigroup rose $1.91, or 5.5 percent, to $36.66 after beating beat earnings estimates.
Most other financial stocks followed Citi higher. Bank of America rose 3.5 percent, and JPMorgan Chase rose 1.8 percent. However, Wells Fargo continued to struggle after reporting a record profit on Friday. Analysts warned it might have trouble making money on interest payments for loans.