March 13, 2012 in Business

Strong retail sales lifts Nasdaq, Dow to new highs

By Kate Gibson MarketWatch
 

NEW YORK — U.S. stocks leapt today, with the Nasdaq composite finishing above 3,000 for the first time in 11 years, after JPMorgan Chase & Co. raised its dividend, retail sales climbed and the Federal Reserve held rates at record lows.

“You don’t want to fight the Feds,” Nick Raich, director of research at Key Private Bank in Cleveland, said of the coordinated actions by the U.S. Federal Reserve and its counterparts overseas.

“It’s been across the globe, the rally, and a lot of it has to do with the over $6 trillion in stimulus being pumped into the economy,” Raich added.

“We avoided a major banking crisis in Europe, and central banks are doing all they can to reinflate the economy and prop up stock prices,” Raich said.

“Today’s news by and large was positive. This economy is still picking up steam,” said Peter Tuz, president of Chase Investment Counsel.

Reclaiming its perch above 13,000, the Dow Jones industrial average rose 217.97 points, or 1.7 percent, at 13,177.68, its biggest single-day jump since Dec. 20, 2011, and its highest level since Dec. 31, 2007. The Dow last closed above 13,000 on Feb. 28, its first finish above that level since the middle of 2008.

JPMorgan Chase led blue-chip gains, up 7 percent after the bank said it would raise its quarterly dividend and repurchase $15 billion of its stock by the end of the first quarter 2013.

The S&P 500 index added 24.86 points, or 1.8 percent, to 1,395.95.

Also topping a psychological milestone, the Nasdaq composite climbed 56.22 points, or 1.9 percent, to 3,039.88, its highest level since the end of 2000.The Nasdaq cleared 3,000 on Feb. 29, but failed to retain the level through the close.

Apple Inc. shares, the biggest Nasdaq component, hit a record $568.18, and finished at $568.10, up 2.9 percent, after Jefferies raised its price target on the technology company and research group IDC raised its outlook for table computer shipments for 2012.

The dollar climbed against the euro and the yen, while bond prices fell, with the yield on the benchmark 10-year note rising.

The price of crude wavered between gains and losses, with oil futures for April delivery closing up 37 cents at $106.71 a barrel on the New York Mercantile Exchange.

As expected, the central bank kept interest rates at record lows and said it would continue its program of swapping short-term for longer-term Treasurys.

“They are in a balancing act between some signs of economic growth, chiefly better employment numbers, against rising gas and food prices, so it’s steady as she goes until the next meeting,” said Tuz at Chase Investment Counsel.

The Commerce Department reported retail sales climbed 1.1 percent in February, while the prior two months were revised higher.

The upward revisions imply first-quarter economic growth could be “a bit stronger” than first estimated, noted Dan Greenhaus, chief global strategist at BTIG LLC in New York.


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