Stocks little changed despite strong retail sales
NEW YORK (AP) — Stocks were little changed on Wall Street on Wednesday despite an unexpectedly strong increase in U.S. consumer spending last month.
The Dow Jones industrial average was down 14 points, or 0.1 percent, to 14,436 as of 11:50 a.m. EDT. The index rose for an eighth straight day Tuesday, its longest streak of advances in more than two years.
The Standard & Poor’s 500 index was down one point at 1,551. The Nasdaq composite fell three points, or 0.1 percent, to 3,239.
Americans spent at the fastest pace in five months in February, boosting retail spending 1.1 percent compared with January, the Commerce Department reported Wednesday. Economists had forecast a rise of just 0.2 percent, according to data provider FactSet.
“As the market rises, so do expectations,” said Bill Stone, chief investment strategist at PNC Wealth Management. “So, even if you get good numbers you don’t necessarily get the market to go up.”
The solid increase in retail sales is encouraging for the economy because it shows that Americans kept spending despite a payroll tax increase that has lowered take-home pay this year for most workers. Consumer spending drives about 70 percent of the U.S. economy.
Stocks of retail companies rose after the report. Kohl’s rose $1.18 to $48.52, and Best Buy gained 61 cents to $20.89.
If the Dow closes higher, it would match the longest streak of advances since May 1996, according to Ryan Detrick, an analyst at Schaeffer’s Investment Research. The Dow is up 10.2 percent this year and has closed at record highs over the past six days.
Demand for stocks has been propelled this year by optimism that the housing market is recovering and that companies have started to hire. Strong company earnings and ongoing stimulus from the Federal Reserve are also helping make stocks more attractive.
The broader S&P 500 index has gained 8.8 percent and is within less than a percentage point of its record close of 1,565.15 set in October 2007.
Stocks in Europe were mixed. Most markets edged lower after industrial production in the countries using the euro unexpectedly fell by 0.4 percent in January. Economists had expected it to rise by 0.1 percent, according to FactSet.
The yield on the 10-year Treasury note rose to 2.05 percent from 2.02 percent.
Among stocks making big moves;
• Spectrum Pharmaceuticals plunged $4.28, or 34 percent, to $8.15 after the pharmaceutical company said sales of its drug Fusilev could fall by more than half this year.
• Dole dropped 95 cents to $10.78 after the company’s fourth-quarter results fell short of analysts’ expectations. The fruit company cited lower banana prices in North America.
• Silver Spring Networks, a technology company based in Redwood City, Calif., surged $4.01, or 24 percent, to $21.01 on its stock market debut.
• Express fell $1.49 to $17.36 after the clothes retailer’s earnings report disappointed investors. Michael Weiss, the company’s CEO and chairman, told analysts on a conference call that consumer numbers were “down noticeably” compared to last year.