Christmas sales news boosts Wall Street
More signs of the improving business climate – better-than-expected holiday sales and Nokia’s latest fourth-quarter outlook – sent IS stocks moderately higher yesterday.
The advance carried the Nasdaq composite index to its first close above 2,100 in more than two years.
The positive corporate news overshadowed a relatively poor reading on the job market, leading investors to put aside trepidation that had been building about tomorrow’s report on employment, which could set the tone for sentiment about the economy in coming days.
“It seems that the good earnings news forced people into the market and overshadowed the jobless data,” said Todd Clark, head of listed equity trading at Wells Fargo Securities.
The Nasdaq advanced 22.57 or 1.1 percent, to 2,100.25, the first time it closed above 2,100 since July 3, 2001.
The Dow Jones industrial average closed up 63.41, or 0.6 percent, at 10,592.44, its highest close since March 2002.
The Standard & Poor’s 500 index rose 5.59, or 0.5 percent, to 1,131.92, its highest close since April 2002.
“The money flows into the market are very positive, and volume has been strong,” Clark said. “Barring a disaster tomorrow, I don’t see how we couldn’t be looking at more rises in prices.”
Major retailers gave a boost to market sentiment before the opening bell with a series of reports showing higher same-store sales in December, thanks to a late surge of holiday season spending.
TJX, operator of TJ Maxx and Marshalls, rose after reporting a 4 percent rise in same-store sales. The company said foreign exchange gains also bolstered its results.
Telecommunications stocks advanced strongly on upbeat outlooks and a surprise announcement from Nokia, which raised its estimates for fourth quarter earnings.
Nokia prices surged in heavy trading, and shares in other makers of telecommunications equipment were also higher.
Jeff Swensen, a senior trader at John Hancock Funds in Boston, said the positive news from Nokia combined with the stronger reports on retail sales were raising hopes that the upcoming earnings season would yield more good news on corporate profits.
“We built some positive momentum off the news from Nokia,” Swensen said. “The important thing was we were able to rally on Monday and keep up the momentum. We’re expecting a good earnings season and more good readings on the economy.”
The Labour Department reported new claims for unemployment benefits increased last week following three straight weeks of declines, but the news wasn’t bad enough to stifle optimism on the stock market.
Investors are looking ahead to tomorrow for a broader reading of the job market, when the government reports the overall civilian unemployment rate for December as well as figures on how many jobs were created or lost last month.
The Russell 2000 index of smaller companies was up 5.00 or 0.9 percent, at 579.62.
Advancing issues outnumbered decliners 4 to 3 on the New York Stock Exchange. Volume was moderately heavy.
