Better-than-expected retail sales data offset discouraging
industrial production numbers from Europe, lifting major indices
higher on Wednesday. The Dow Jones eked out gains for the ninth
consecutive day while the S&P 500 closed around 1% lower than
its all-time high. Among the top ten S&P 500 industry groups,
consumer discretionary stocks were the biggest gainers while the
materials sector was the biggest loser.
The Dow Jones Industrial Average (DJI) edged up 0.04% to close
the day at 14,455.28. The S&P 500 rose 0.1% to finish
yesterday's trading session at 1,554.52. The tech-laden Nasdaq
Composite Index gained 0.1% to end at 3,245.12. The fear-gauge
CBOE Volatility Index (VIX) lost 3.6% to settle at 11.83.
Consolidated volumes on the New York Stock Exchange, American
Stock Exchange and Nasdaq were roughly 5.5 billion shares, well
below the daily average of 6.48 billion shares. Advancing stocks
outnumbered the decliners. For the 53% that advanced, 44%
The Dow continued to march through positive territory for the
ninth consecutive day, making this rally the longest one in the
last 16 years. The blue-chip index and the S&P 500 have
gained 10.3% and 9%, respectively in 2013 till date. Benchmarks
started the trading session in the red following Europe's weak
industrial production numbers but recovered thanks to strong
retail sales data.
According to the U.S. Department of Commerce, retail and food
services sales increased to $421.4 billion, up 1.1%. Growth in
retail sales came in higher than the consensus estimate of 0.5%.
Retail trade sales were up 1.3% from the previous month. Non
store retail sales grew 15.7% year over year. High retail sales
are attributable to an increase in gasoline sales and sales from
auto and motor vehicle dealers. Gasoline sales increased 5% in
February. On a year over year basis auto and motor vehicle
dealers increased 8.8%.
About 70% of economy activity in the U.S. can be attributed to
consumer spending. Hence, strong retail data indicates an
improving economy. Moreover, positive retail sales figures also
indicate consumer spending has not been affected by higher taxes
imposed by the government.
Benchmarks were pushed into negative territory in early
trading following weak industrial production numbers from Europe.
Eurozone's industrial output dropped 0.4% below the expected
level of 0.1%. Industrial production in Germany and France fell
0.4% and 1.2%, respectively. More than a third of the Eurozone's
industrial production is attributable to Germany. Despite poor
economic numbers, the European Central Bank (ECB) anticipates a
slow recovery in the region in second half of 2013.
On the earnings front, shares of Express, Inc. (NYSE:
) fell 3.2% after earnings came in below the Street's
expectations. Net sales for the quarter grew 8%. The company
guided growth in sales from flat to low single digits for first
Consumer discretionary stocks were the biggest gainers among
the top ten S&P 500 industry groups. The Consumer
Discretionary SPDR (XLY) gained 0.6%. Stocks such as the Walt
Disney Company (NYSE:
), Amazon.com, Inc. (NASDAQ:
), McDonald's Corporation (NYSE:
), Time Warner Inc. (NYSE:
) and Lowe's Companies, Inc. (NYSE:
) increased 0.4%, 0.4%, 0.6%, 0.4% and 0.9%, respectively.
Materials stocks were the biggest losers among the top ten
S&P 500 industry groups. The Materials Select Sector SPDR
(XLB) lost 0.2%. Stock such as E I Du Pont De Nemours And Co
), the Dow Chemical Company (NYSE:
), FMC Corp (NYSE:
), Eastman Chemical Company (NYSE:
) and Praxair, Inc. (NYSE:
) lost 0.2%, 0.1%, 0.2%, 0.2% and 0.1%, respectively.
AMAZON.COM INC (AMZN): Free Stock Analysis
DU PONT (EI) DE (DD): Free Stock Analysis
DISNEY WALT (DIS): Free Stock Analysis Report
DOW CHEMICAL (DOW): Free Stock Analysis
EASTMAN CHEM CO (EMN): Free Stock Analysis
EXPRESS INC (EXPR): Free Stock Analysis
FMC CORP (FMC): Free Stock Analysis Report
LOWES COS (LOW): Free Stock Analysis Report
MCDONALDS CORP (MCD): Free Stock Analysis
PRAXAIR INC (PX): Free Stock Analysis Report
TIME WARNER INC (TWX): Free Stock Analysis
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