US stocks edged up on Wednesday, as surprisingly strong retail sales data improved the outlook for holiday sales and boosted chain-store shares, while Exxon Mobil Corp and the energy sector led the way as oil prices rose.
Gains were capped, though, as higher crude oil prices prompted investors to unload some shares of major energy consumers, including big industrials such as Caterpillar Inc and General Electric Co.
Retail stocks climbed, with the No 2 US discount chain Target Corp and Federated Stores Inc, the parent of Macy's and Bloomingdale's department stores, each gaining more than 1 percent after the government reported November retail sales that easily exceeded Wall Street's forecasts.
"From the data that has come out on retail sales, it is the economy that just won't slow down too much," said Robert Lutts, president and chief investment officer with Cabot Money Management in Salem, Massachusetts. "That is what is driving the market today."
The Dow Jones industrial average advanced 1.92 points, or 0.02 percent, to end at 12,317.50. The Standard & Poor's 500 Index rose 1.65 points, or 0.12 percent, to finish at 1,413.21. The Nasdaq Composite Index eked out a gain of just 0.81 of a point, or 0.03 percent, to close at 2,432.41.
The Dow industrials soared to a record intraday high at 12,368.61 after the opening, but the surge encouraged investors to sell some shares and lock in profits.
Exxon Mobil was the top gainer in both the Dow and the S&P 500. Its stock shot up 1.5 percent, or $1.11, to $77.36 on the New York Stock Exhcange. US crude oil futures for January delivery rose 35 cents to settle at $61.37 a barrel, after government data showed crude inventories fell in the latest week.
The Dow's biggest loser was oil-hungry Caterpillar, the maker of heavy equipment, down 1.3 percent, or 79 cents, at $61.49. The top decliners in the S&P 500 were General Electric, down 0.4 percent, or 14 cents, at $35.50, and Procter & Gamble Co, down 0.5 percent, or 30 cents, at $63.40.
The S&P Retail Index was up 0.6 percent. Wal-Mart's stock rose nearly 1 percent, or 42 cents, to close at $45.90 on the NYSE. It ranked among the Dow's major advancers and also contributed to the S&P 500's gain.
Even good news can have a downside on Wall Street, with the robust retail sales figures renewing some concern about the outlook for interest rates. Traders said it probably would diminish chances of a rate cut any time soon after the Federal Reserve kept benchmark rates unchanged at its latest policy meeting on Tuesday.
"Stock market investors are thinking: 'Wait a minute, maybe we won't see a cut in interest rates until late in the spring, or the summer,'" said David Straus, who helps manage $215 million at Johnston Lemon Inc in Washington.
Short-term US interest rate futures showed the perceived chance that the Federal Reserve would cut interest rates in the first quarter at about 18 percent after the retail sales report, down from about 30 percent previously.
Deal news gave some support to the market. Sources familiar with the situation said UAL Corp's United Airlines and Continental Airlines have held preliminary talks about a possible merger. UAL shares shot up 4.7 percent, or $2.01, to $45.24 on the Nasdaq. Continental's stock gained 4.4 percent, or $1.88, to $44.76 on the NYSE.
Comments
Comments are closed.