S&P 500 Index Advances 1.2% on Retail Sales Jump of 0.7%

Nichole Harper
11 Dec, 2014
New York City

Stocks on Wall Street surged after better-than-expected increase in retail sales offered yet another confirmation of widening and improving economic activities. Retail sales rose 0.7%, weekly new claims of unemployment were below 300,000 and import price inflation was at a 2-year low on cheaper oil.

[R]12:40 PM New York – Stocks on Wall Street surged after better-than-expected increase in retail sales offered yet another confirmation of widening and improving economic activities. Retail sales rose 0.7%, weekly new claims of unemployment were below 300,000 and import price inflation was at a 2-year low on cheaper oil.[/R]

U.S. market indexes surged after the release of latest reports on retail sales, weekly jobless claims and import price inflation.

Market indexes soared after retail sales in November increased 0.7% following 0.5% in October.

The rise in retail sales was ahead of analysts’ estimate of 0.4% and also added to a growing belief that economic activities in the U.S. are picking up.

The gasoline service station sales declined 0.8% in November offset by the increase of 1.7% in automobile sales.

November month sales increase was the largest since March on the steady decline in oil price, rising consumer confidence and steady job creation.

Department of Commerce reported retail sales adjusted for seasonality and calendar jumped 0.7% to $449.3 billion from October and climbed 5.1% from a year ago month.

Total retail sales of three months to November climbed 4.7% from a year ago period.

Motor vehicles and parts sales increased 1.7%, building materials sale rose 1.4% and clothing and accessories gained 1.2%.

In fact, nine of the ten categories tracked by the government showed an increase, except gasoline stations sales.

In a separate report, the Labor Department said new claims of employment benefits declined last week below 300,000 mark, contributing to yet another evidence of widening economic activities.

Department of Labor said seasonally adjusted weekly jobless claims fell 3,000 to 294,000 from the revised previous week claims of 297,000.

A second report from the Labor Department showed import prices declined the most in more than two years in November.

On Wall Street trading, Tollbooth Index jumped 1.6% or 161.19 to 9,996.14.

S&P 500 index jumped 28.50 or 1.4% to 2,054.70 and the Nasdaq Composite Index climbed 69.51 or 1.5% to 4,753.78.

Crude oil futures declined 4.8% or $3.05 to $60.75 a barrel and Brent Crude Oil futures fell 4.4% or $2.92 to $63.85 a barrel.

U.S. Movers

Lululemon Athletica inc ((LULU)), the sports and yoga apparel and accessory maker reported net revenues in the third-quarter ending on November 2 climbed 10% to $419.4 million from a year ago period. Comparable store sales for the quarter increased 3%.

Net income in the quarter dropped 8.5% to $60.5 million or 42 cents a diluted share compared to $66.1 million or 45 cents from a same quarter last year.

For the fourth quarter, the company expected net revenue in the range of $570 million to $585 million and diluted earnings per share to be between 64 cents and 69 cents.

Lowe''s Companies, Inc ((LOW)), the home improvement retailer estimated total sales for the year to climb between 4.5% and 5% and comparable sales to jump between 3.5% and 4%.

Yum! Brands, Inc ((YUM)), the fast food restaurant operator forecasted earnings per share growth for the year in mid-single-digit compared to its prior forecast of between 6% and 10%.

For the fiscal 2015, the company expected earnings per share growth of about 10%.

European Markets

In London trading, FTSE 100 index slipped 32.26 or 0.5% to 6,467.78 and in Frankfurt the DAX index gained 0.6% or 57.43 to 9,857.16.

In Paris, CAC 40 index fell 0.06% or 2.74 to 4,225.17.

In European corporate news, Inditex profit rose 1% to €1.7 billion on 17% increase in revenues and estimated five weeks sales surged 14%.

Inditex SA, the Spain-based world’s largest apparel retailer reported revenues in the nine-month ending in October jumped 7% to €12.71 billion from €11.93 billion a year ago period.

Profit in the period rose 1% from a year ago to €1.69 billion compared to €1.67 billion.

The retailer said total sales in local currencies surged 14% in the latest five-week period between November 1 and December 8.

Sports Direct International Plc, the U.K.-based sports and leisure clothing, footwear and equipment retailer group revenues in the first-half ending on October 26 jumped 6.5% to £1.43 billion from £1.34 billion a year ago period.

Profit in the period climbed 7.4% from a year ago to £115.3 million compared to £107.3 million and diluted earnings per share gained to 18.6 pence from 17.4 pence.

Asian Markets

Stocks in Tokyo closed lower and extended 2-day losses to more than 3% after investors worried about the impact of the sharp plunge in oil prices since July.

Oil explorers led the decliners and the yen strengthened after currency traders sought safe haven on the ongoing turmoil in Greece.

The Cabinet office said core machinery orders in October declined 6.4% for the first time in five months to 778.0 billion yen compared to the previous month.

The Nikkei 225 Stock Average slumped 155.18 or 0.9% to 17,257.40 and the broader Topix index decreased 9.79 to 1,397.04.

The yen gained 0.9% to 118.69 against one dollar.

Hair transplant service provider and wigs maker, Aderans Co Ltd said sales growth though brisk edged lower in November.

Russia’s President Vladimir Putin travelled to India and announced a deal to build 12 more nuclear power reactors as the fast growing nation looks for ways to diversify electricity production sources.

Russia-based Alrosa, the largest diamond mining company, signed deals with 12 companies in India to supply diamonds worth $700 million each of the next three years.

In Mumbai trading, Sensex Index declined 229.09 or 0.8% to close at 27,602.01. The CNX Nifty fell 62.75 or 0.8% to 8,292.90.

Mahindra & Mahindra Limited, the tractor maker agreed to acquire a stake in Sweden-based struggling Saab Automotive.

Oil and Natural Gas Corporation Limited, the oil explorer won an offshore oil and gas exploration block in New Zealand.