- The Washington Times - Friday, December 26, 2008


Wall Street ended the Christmas holiday week with modest gains during light trading Friday amid generally disappointing economic news at home and abroad, though online retailer Amazon said it racked up its best holiday sales volume ever.

It marked the second consecutive session in which the major market indexes rose.

At the close and on broad-based buying, the Dow Jones Industrial Average was up 47.07, or 0.56 percent, to 8,515.55. The Nasdaq, which is heavily tilted toward technical issues, rose 5.34, or 0.35 percent, to 1,530.24. The broader Standard & Poor’s 500 climbed 7.38, or 0.85 percent, to 872.80.

In a departure from an otherwise bleak retail picture, Amazon.com Inc. said this holiday season was its best. More than 6.3 million items were ordered and 5.6 million were shipped on Dec. 15, its highest sales day, it said.

Electronics were the bestsellers for Amazon, which started life as an online seller of books. They included Samsung’s 52-inch LCD HDTV, Apple’s iPod, Nintendo Wii and the Blokus board game, the company said.

Another contribution to the market’s higher opening may have been a reaction to the Federal Reserve’s permission Wednesday for GMAC Financial Services to become a bank holding company, allowing it to become eligible to participate in the government’s $700 billion Troubled Relief Asset Program, or TARP. GMAC is the finance arm of the General Motors Corp. Shares of both GM and the Ford Motor Co. moved up.

In the oil market, the United Arab Emirates said it would cut production to comply with recent reductions announced by OPEC. The price of a barrel of oil for February delivery closed up $1.50 to $37.64 on the New York Mercantile Exchange.

At the pump, the national average for the price of a gallon of gasoline dropped to $1.642, the AAA and the Oil Price Information Service said, the lowest price since February 2004. The falling price of gasoline has been one of the bright spots for American consumers in the recessionary gloom.

Trading was light because so many investors took off for the holiday week and there were no major economic reports. The market’s move into positive territory extended a moderate Christmas Eve rally, when the Dow closed up nearly 49 points, even though the economic news was not good.

At home, the sales reports from nearly all retailers, as expected, were not good. SpendingPulse, a unit of MasterCard Worldwide, said holiday shopping sales, excluding gasoline and autos, dropped between 5.5 percent and 8 percent compared to a year ago, with the clothing, electronics and luxury sectors especially hard hit.

It said this year marked “one of the most challenging holiday shopping seasons in decades.” That had been expected because of the relatively poor turnout among shoppers since Black Friday, the traditional hot shopping day after Thanksgiving.

Retailers, especially the big chains, may try to make up for some of the losses with another Black Friday, this one post-Christmas, with heavily discounted prices, some up to 75 percent off. Many big stores, including Macy’s and J.C. Penney, opened at dawn.

Consumer spending by Americans is tracked very closely because it accounts for up to 70 percent of U.S. economic activity. But the yearlong recession, unemployment of 6.7 percent, the burst of the housing bubble and worries about future job losses have changed consumer buying habits, at least for now.

With Asian exporters dependent for sales on the huge U.S. market, Japanese automakers and manufacturers of electronic goods cut their production last month by 8.1 percent because of lower demand. It marked the biggest reduction since record keeping started in 1953. The Japanese government projected another 8 percent cut this month.

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