Stocks end higher after strong retail sales data

By Daniel Wagner, Associated Press
Updated 7m ago

Stocks ended higher on strong retail sales news and better corporate profit reports.

The market was helped Friday by economic reports, which appeared encouraging mainly because expectations were so low. Hiring has improved modestly, and manufacturing continued to grow.

The Dow Jones industrials and the S&P 500 stock indexes ended up 1.5% and 1.7%, respectively, scoring one of their best weeks in the past five. The Nasdaq finished up 1.8%.

STORY: Autos lead big jump in September retail sales
The government says retail sales increased 1.1% in September, biggest gain in seven months and twice what economists had expected. Retail sales are a key early barometer of consumer spending, the biggest contributor to economic activity.

Stock trend

Dow Jones industrial average, five trading days Despite a fairly subdued session in Asia overnight, stock markets in Europe were trading higher Friday.

The news Friday tempered the downbeat news from the eurozone debt crisis that has dominated markets.

Google made $2.7 billion in the third quarter, up 26%, and added 7,000 workers the past year despite worries about the U.S. economy. CEO Larry Page crowed that the results were "gangbusters."

Meanwhile food and personal care company Unilever announced a 16.7 billion ruble acquisition of Russian beauty company Concern Kalina, signaling expansion in a large emerging consumer market in the region, while Swiss-based agrochemicals firm Syngenta reported strong third-quarter sales.

"Company news is again being taken into consideration, where before macro news was dominant," said Commerzbank market analyst Achim Matzke in Frankfurt. "For example, that Unilever is embarking on expansion in Russia is being taken as a positive by the markets."

Earnings news weighed in the balance against worries from Europe's government debt crisis. Ratings agency Standard and Poors downgraded Spain overnight, while Fitch warned about a number of banks around the world.

European officials are reading what they say will be a decisive effort to quell the debt crisis, renegotiating a new debt relief deal for Greece that could inflict higher bond writedowns on creditor banks. Ahead of that, the European Union is seeking to force banks that are deemed to be insufficiently capitalized to increase their financial cushions, a step that can lead to shareholder losses and reduced dividends.

In Europe Friday, London's FTSE index rose 1.2%, Germany's DAX 30 was up 0.9%, and France's CAC 40 traded 1% higher.

Oil moved higher with stocks, with New York Mercantile month-ahead crude up $2.47 to $86.70. The euro ticked up 0.2% to $1.38.

Asian stocks were mostly lower Friday as investors worried about uncertainty over corporate earnings and Europe's debt crisis while China said inflation eased but stayed high.

Japan's Nikkei 225 index fell 0.8% to close at 8,747.96 and Hong Kong's Hang Seng slid 1.4% to 18,501.79. The Shanghai Composite Index in mainland China slipped 0.3% to finish at 2,431.37 after authorities said China's inflation rate eased to 6.1% in September. It's still well above the official target though.

Analysts said China's September inflation data was another sign that price increases are moderating after peaking in July, but they didn't expect the government to ease back on inflation-fighting measures just yet.

"Too many policy obstacles still lie ahead" regarding the European debt crisis, strategists at Credit Agricole CIB said in a research note, adding that questions remain unanswered over the size of recapitalization needed for European banks and how much of a loss investors will have take on Greek bonds.

http://www.usatoday.com/money/markets/s ... 50770072/1