Friday November 23, 06:58 PM
Wall St. rallies as retailers gear up for Christmas
NEW YORK (AFP) - US stock markets rallied higher Friday as big retailers kicked off the critical pre-Christmas shopping season with tempting discounts aimed at persuading consumers to keep spending.
The market rebound ended a volatile week on Wall Street and followed sharp falls on Wednesday ahead of Thursday's Thanksgiving Day holiday.
The Dow Jones Industrial Average closed up a notable 181.84 points (1.42 percent) at 12,980.88.
The technology-stacked Nasdaq composite (NASDAQ: news) jumped 34.45 points (1.34 percent) to 2,596.60 and the Standard & Poor's 500 broad-market index soared 23.93 points (1.69 percent) to a finish of 1,440.70.
Wall Street's surge came after European stock markets had also closed higher for the weekend.
US investors were closely tracking "Black Friday" retail sales for indications of whether consumers are continuing to splurge or cutting back their spending amid a housing downturn and a related credit squeeze.
"Today's abbreviated session will likely tell us little about the near-term trend, but results of consumer spending today on what is known as Black Friday is likely to be a factor influencing trading next week," said Al Goldman, a chief market strategist at AG Edwards.
Economists say consumer spending, which accounts for two-thirds of US economic growth, will be even more crucial than usual this year in maintaining economic momentum.
Major retailers bombard shoppers with tantalizing discounts on a range of goods on Black Friday as they gear up for the annual pre-Christmas shopping frenzy.
Black Friday is one of the busiest shopping days of the year and key to retailers being in "the black," or in profit.
Some economists are concerned, however, that consumers may tighten their belts this year because of declining home prices and rising fuel bills.
Retail stocks strengthened amid the wider market gains.
Sears was up 2.0 percent at 112.58 dollars, Circuit City Stores Inc., a major dealer of electronic goods, closed a hefty 19.4 percent higher at 6.51 dollars and Target's shares finished up 5.7 percent at 56.17 dollars.
Macy's stock closed up 5.4 percent at 30.03 dollars.
"The day the retail sector gears up for all year has arrived," said Dick Green, a market analyst at Briefing.com.
Green said national retail organizations are anticipating a four percent increase in holiday sales. Such a reading is "pretty decent" in the face of a housing downturn and mounting energy costs, but would still fall under the average increase of the past ten years, Green added.
Investors appeared to largely shrug off higher oil prices as New York's main oil futures contract, light sweet crude for January delivery, rose 75 cents to 97.96 dollars a barrel in early afternoon deals.
Unease over the dollars's decline persisted, however, as the euro struck a record high of 1.4967 dollars in Asian trading.
The dollar's decline makes it more expensive for Americans to buy foreign goods and has raised concerns about whether overseas investors will continue favoring US assets, but the currency's weakness has bolstered US exports.
Bond prices were stronger. The yield on the 10-year US Treasury bond fell to 4.012 percent from 4.024 percent Wednesday while the 30-year bond dropped to 4.438 percent from 4.467 percent. Bond yields and prices move in opposite directions.
The New York Stock Exchange closed early Friday due to the extended Thanksgiving holiday weekend.
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