Wall Street jumps more than 1 percent on data after three-day slump

SHAFAQNA – U.S. stocks bounced back on Thursday, with all three major indexes surging more than 1 percent, as data pointed to a strengthening U.S. economy and boosted optimism about holiday spending.

The gains come after the S&P 500 shed 2.4 percent over the previous three sessions, the worst run for the benchmark index in two months, as weak oil prices weighed down the energy sector.

Still, lower oil prices likely encouraged consumer holiday spending, and retail sales data for November beat expectations. The S&P retail index .SPXRT jumped 1.9 percent, lifted by a 2.1 percent climb in Home Depot (HD.N).

“It suggests overall spending is going to do well, and today’s rally confirms the resumption of a year-end rally which probably will take the S&P to about 2,100,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

Other economic data showed a strengthening labor market, as weekly initial jobless claims dipped by 3,000 to an adjusted 294,000 while the drop in oil prices helped spur the biggest decline in U.S. import prices in 2-1/2 years.

Energy shares rebounded sharply with Brent crude oil prices. Energy led gains on the S&P 500 along with consumer discretionary shares and technology. The S&P energy sector .SPNY, up 2 percent on the day, is down 12.8 percent for the year.

Brent crude LCOc1, down more than 40 percent from its June high, was last up 0.4 percent. [O/R]

At 1:15 p.m. the Dow Jones industrial average .DJI rose 189.43 points, or 1.08 percent, to 17,722.58, the S&P 500 .SPX gained 24.72 points, or 1.22 percent, to 2,050.86 and the Nasdaq Composite .IXIC added 62.98 points, or 1.34 percent, to 4,747.01.

The day’s economic data may influence investors’ expectations on whether the Federal Reserve will adjust its language to keep interest rates near zero for a “considerable time” when policymakers meet next week.

Among the day’s biggest gainers was Urban Outfitters (URBN.O), up 9.3 percent. Lululemon Athletica (LULU.O) jumped 9.2 percent after the maker of yoga apparel posted quarterly results.

Staples Inc (SPLS.O) jumped 7.5 percent and Office Depot (ODP.O) climbed 10.3 percent after activist investor Starboard Value LP disclosed stakes in both office-supply retailers.

Advancing issues outnumbered declining ones on the NYSE by 2,308 to 732, for a 3.15-to-1 ratio; on the Nasdaq, 1,963 issues rose and 722 fell for a 2.72-to-1 ratio.

The benchmark S&P 500 index was posting 35 new 52-week highs and 8 new lows; the Nasdaq Composite was recording 86 new highs and 56 new lows.

Source : Reuters.com

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