Stocks Close Moderately Higher But Well Off Best Levels - U.S. Commentary

(RTTNews) - After showing a strong upward move in early trading on Thursday, stocks gave back some ground over the course of the session but managed to close moderately higher. The gains on the day partly offset the steep losses posted in the previous session.

The major averages ended the day in positive territory but well off their highs for the session. The Dow rose 63.19 points or 0.4 percent to 17,596.34, the Nasdaq climbed 24.14 points or 0.5 percent to 4,708.16 and the S&P 500 advanced 9.19 points or 0.5 percent to 2,035.33.

The early strength on Wall Street was largely due to the release of a Commerce Department report showing a bigger than expected increase in U.S. retail sales in the month of November.

The report said retail sales climbed by 0.7 percent in November following an upwardly revised 0.5 percent increase in October. Economists had expected sales to rise by 0.4 percent.

The better than expected data generated optimism about the holiday shopping season, which is the most important time of the year for retailers.

Peter Boockvar, managing director at the Lindsey Group, said, "While it's easy to say that lower gasoline prices gave a boost to sales, we of course don't know how much of the savings at the pump was spent or saved."

"We'll assume some was spent but also the better labor market was likely a factor in the modest upside too," he added.

However, stocks pulled back off their best levels in afternoon trading due in part to news that House leaders postponed a vote on a $1.1 trillion spending bill needed to avoid another government shutdown.

The House was scheduled to vote on the bill this afternoon, but final passage came into question after the legislation barely cleared a procedural hurdle.

With the bill facing opposition from both sides of the aisle and a midnight deadline looming, the House may vote on a stopgap bill to give lawmakers more time to negotiate.

A continued decrease by the price of oil also weighed on the markets, with crude for January delivery sliding $0.99 to $59.95 a barrel. This marks the first time oil closed below $60 a barrel in over five years.

Sector News

Despite the pullback by the broader markets, significant strength remained visible among retail stocks. The Dow Jones Retail Index ended the session well off its best levels of the day but still closed up by 1.4 percent.

Office Depot (ODP) and Staples (SPLS) turned in two of the retail sector's best performances amid optimism about a merger between the two office supplies retailers.

Airline stocks also held on to notable gains, resulting in a 1.2 percent advance by the NYSE Arca Airline Index. Delta (DAL) helped to lead the sector higher, jumping by 4.6 percent.

Networking, utilities, and computer hardware stocks also ended the day notably higher, while considerable weakness emerged among steel and gold stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both slumped by 0.9 percent, while China's Shanghai Composite Index fell by 0.5 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index rose by 0.6 percent, the French CAC 40 Index edged down by 0.1 percent and the U.K.'s FTSE 100 Index dropped by 0.6 percent.

In the bond market, treasuries regained ground after coming under pressure in early trading but still closed slightly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by nearly a basis point to 2.178 percent.

Looking Ahead

Developments in Washington are likely to be in focus on Friday along with the release of reports on producer price inflation and consumer sentiment.

On the earnings front, software giant Adobe Systems (ADBE) is among the companies releasing their quarterly results after the close of today's trading.