Retail sales report boosts US stock market

NEW YORK (AP) - Good news on U.S. retail sales lifted the stock market Thursday, although worries about the latest plunge in oil prices kept the gains in check.

Investors are caught between two conflicting thoughts: the improving U.S. economy, lower energy costs and higher consumer spending are expected to boost profits for many companies. But the recent drop in oil prices, which has accelerated in recent days, has investors worried that earnings for energy companies will suffer.

The drop in the price of oil has been a significant reason why stocks on pace to post their first weekly loss in nearly two months.

"Here on one hand the U.S. economy is doing very well. You can see it today in the retail sales numbers. But the global economy isn't doing well, which is why oil prices are dropping," said Russ Koesterich, global chief investment strategist at Blackrock.

The Dow Jones industrial average rose 63.19 points, or 0.4 percent, to 17,596.34. It was up 225 points earlier.

The Standard & Poor's 500 index rose 9.19 points, or 0.5 percent, to 2,035.33 and the Nasdaq composite rose 24.14 points, or 0.5 percent, to 4,708.16.

Companies that rely the most on spending by consumers rose the most Thursday. The S&P 500 consumer discretionary sector, a category that includes department stores and other retailers, gained 0.7 percent, while makers of consumer staples increased 0.8 percent.

The rise came after the Commerce Department said U.S. retail sales rose by 0.7 percent in November. The encouraging retail sales report could not have come at a more crucial time for retailers, since holiday sales often mean the difference between retail companies reporting a profit or a loss for the year.

Falling gasoline prices led to a decline of 0.8 percent in sales at gas stations, but that money was likely spent elsewhere, investors said.