Encouraging holiday season sales numbers and labor data helped
the Dow and S&P 500 continue their record run on Thursday.
Initial claims dropped for the week ending Dec 21 and holidays
sales were reported to have improved between Nov 1 and Dec 24
period. Positive holiday sales numbers lifted the retail sector
into the green and was among the major gainers.
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Ahead of Wall Street
The Dow Jones Industrial Average gained 0.8% to end at a record
high of 16,479.88. The Standard & Poor 500 (S&P 500) too
notched up a record high of 1,842.02, up 0.5%. The tech-laden
Nasdaq Composite Index added 0.3% to close yesterday's trading
session at 4,167.18. The fear-gauge CBOE Volatility Index dropped
1.2% to 12.33. As expected volumes remained low at 3.3 billion
shares being traded on the exchanges, as against monthly average
so far of 6.2 billion. The advancers outpaced the decliners as
for 51% stocks that gained on NYSE, 46% ended in the red.
Boxing Day had enough encouragement for the traders as holiday
sales were reported to be positive. According to MasterCard
Advisors SpendingPulse, sales during Nov 1 to Dec 24 improved
2.3% year on year. The rate of increase was a significant jump
from 0.7% increase reported last year. In fact, this year's sales
increase is the best in three years.
SpendingPulse records the level of purchases of jewelry, luxury
and home furniture & furnishing, apparel, and electronics
segments in the holiday period. The positive data boosted the
retail stocks and the Consumer Discretionary SPDR (XLY) gained
0.7%. Among the retail stocks, J.C. Penney Company, Inc. (NYSE:
), Macy's, Inc. (NYSE:
), Target Corporation (NYSE:
), Coach, Inc. (NYSE:
), Sears Holdings Corp (NASDAQ:
) and Wal-Mart Stores, Inc. (NYSE:
) gained 2.5%, 0.2%, 1.3%, 0.3%, 1% and 0.5%, respectively.
The positive sales numbers by MasterCard Advisors SpendingPulse
comes as a breather after the National Retail Federation (NRF)
had reported in a survey from Prosper Insights & Analytics
that Thanksgiving weekend sales had decline. According to the
report, sales during the period declined 2.7% to $57.4 billion
from $59.1 billion in the year-ago period.
Aditionally, initials claims data was a big boost for investor
sentiment. The U.S. Department of Labor noted that seasonally
adjusted initial claims dropped 42,000 to 338,000 in the week
ending Dec 21. The 4-week moving average increased 4,250 from the
prior week to 348,000.
These reports were enough for the benchmarks to extend their
record run. The Dow is having its longest winning streak since
March and the record finish yesterday marked its sixth
consecutive close at a record high. In fact, the Dow has recorded
new highs 50 times this year out of 249 sessions. The S&P 500
too had its share of laurels, recording new highs 44 times this
The positive numbers yesterday follow a host of encouraging
economic reports released on Tuesday. The U.S. Census Bureau had
noted that new orders for manufactured durable goods jumped 3.5%
in November to $241.6 billion. The jump comfortably outperformed
the consensus estimate of a 1.9% gain and also rebounded from a
0.7% decline in October. Moreover, core capital goods order
jumped 4.5% in November, the highest since January.
According to a joint release by the U.S. Census Bureau and the
Department of Housing and Urban Development noted that sales of
new single-family houses dropped 2.1% from the revised October
rate of 474,000 to a seasonally adjusted rate of 464,000 in
November. Nonetheless, the figure was 16.6% above Nov 2012
figures and also outpaced the consensus estimate of a drop to
440,000. Investor sentiment was also boosted by the fact that the
government revised last three months' new home sales figure