BackWall St rises as retail strength offsets Greek debts
Wall St rises as retail strength offsets Greek debts
PremiumNew York: US stocks edged higher on Thursday, cutting the morning’s modest losses as surprisingly strong March retail sales helped offset worries over the latest twist in Greece’s fiscal crisis.
Online merchant Amazon.com shot up 4.2% to $140.50, leading the S&P 500 higher. For Amazon.com’s stock, this was its third-biggest percentage jump this year.
Investors snapped up retailers’ shares after top US retail chains reported a record increase in March same-store sales. The early Easter holiday and an improving job market helped retailers beat Wall Street’s forecast.
An S&P retail index rose 0.9 percent.
But Wall Street’s enthusiasm about retailers’ strength and consumer spending was curbed by another wave of worry about Greece, which has weighed on investor psyche for months. Investors unloaded Greek assets on Thursday as the government bond market priced in the threat of a liquidity crunch for the euro zone member -- even as Athens sought to reassure markets it was not at risk of default. An index of Greek banks’ U.S.-listed stocks fell 2.7%.
“The message from major retailers is consumer confidence and willingness to spend are improving," said Craig Peckham, equity trading strategist at Jefferies & Co in New York.
But risk-taking was curbed by the widening of credit spreads on Greek sovereign debt, he said.
“There’s speculation the bailout plan appears to be increasingly at risk," Peckham said.
The Dow Jones industrial average gained 13.37 points, or 0.12%, to 10,910.89. The Standard & Poor’s 500 Index rose 1.47 points, or 0.12%, to 1,183.92. The Nasdaq Composite Index added 3.07 points, or 0.13%, to 2,434.23.
Cyclical stock sectors, such as energy, materials and industrials, which are sensitive to economic uncertainty, curbed the Dow’s and the S&P 500’s gains. Caterpillar Inc ranked among the Dow’s top decliners, off 0.3% at $64.26.
Wall Street got a jolt of good news early in the session when major US retail chains reported a record 9.1% jump in March same-store sales. That beat the forecast for a 6.3% gain, according to Thomson Reuters data. Of the 28 retailers that Thomson Reuters tracks, more than 90% topped estimates.
The pick-up in consumer spending, which accounts for roughly two-thirds of U.S. economic activity, could point to stronger corporate earnings and boost stocks.
Shares of United Airlines parent UAL Corp rose 9.3% to $20.71 on Nasdaq and US Airways Group surged 12.9% to $7.71 on the New York Stock Exchange in the wake of news that the two airlines were in merger talks.
In the latest snapshot of the job market, initial claims for state unemployment benefits unexpectedly rose 18,000 to a seasonally adjusted 460,000, the Labor Department said, reflecting volatility in the data associated with the Easter holidays. Economists expected first-time claims to slip to 435,000.
But a hopeful sign for the job market came from continuing jobless claims, which fell to the lowest since December 2008.
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