Retail results give Wall St a reason to rally

Relatively solid retail sales figures inspired another rally on Wall Street today as investors grew more confident about an impending economic recovery.

The Dow Jones industrials scored their best close in more than a month and their third triple-digit gain in four sessions.

But analysts still cautioned against too much optimism, noting that investor sentiment remains fragile. Stocks have moved mostly lower in recent weeks, in between occasional short-lived surges, on concerns that prices are still too high given the uncertain prognosis for corporate earnings.

The Dow closed up 125.93, or 1.3%, at 9,989.67, its highest close since January 10. The Dow rose 118 points last Friday, and 140 on Monday.

Broader stock indicators also advanced. The Standard & Poor’s 500 index climbed 11.01, nearly 1.0%, to 1,118.51, while the Nasdaq composite index gained 24.95, or 1.4%, to 1,859.16.

Investors were encouraged by a Commerce Department report showing retail sales rose by a satisfactory 1.2% in January, excluding volatile car sales. Vehicle sales fell by 4.3%, but that decline was anticipated as zero-percent financing and other incentives waned.

Consumer spending is closely watched because it accounts for two-thirds of the US economy.

The report helped boost retail stocks. Home Depot was up 93 cents at dlrs 51.24. Office supplies retailer Office Depot climbed dlrs 2.30, or 14 percent, to dlrs 18.49 after increasing its estimates for future earnings.

Technology stocks also fared well, helped by a better-than-expected report from Applied Materials.

The chip-making equipment company rose dlrs 3.22, or 7.2%, to dlrs 47.93 after announcing a dlrs 45 million first-quarter loss that beat expectations. The company also said it expects orders in the current quarter to grow 10-15%t.

The buying spread to manufacturing and industrial stocks. General Motors rose dlrs 2.13 to dlrs 51.20, while Boeing gained dlrs 1.75 to dlrs 44.90. Both are Dow components.

Analysts hesitated to get excited about the market’s advance, however, noting that investors remained worried that more companies would disclose accounting improprieties like the ones that preceded Enron’s downfall.

Moreover, while the major indexes have recovered much of their recent losses, they are still below where they started the year: The Dow has fallen 0.3%, the Nasdaq has lost 4.7% and the S&P has fallen 2.6%.

Wall Street also remains vulnerable to fears of more terrorist attacks. Stocks pulled back briefly in the morning on news that Los Angeles International Airport terminal had been evacuated after a mysterious package was found. The package was later determined not to be dangerous.

Wall Street reacted eagerly to the initial public offering of shares of GameStop, the videogame retailing subsidiary of Barnes & Noble. The stock closed at dlrs 20.10, after opening for trading at dlrs 19.25 per share higher than the dlrs 18 price set a day earlier.

Advancing issues led decliners nearly 3 to 2 on the New York Stock Exchange. Volume totalled nearly 1.20 billion shares, compared with almost 1.10 billion shares on Tuesday.

The Russell 2000 index rose 4.32 to 476.33.