STOCKS FINISH HIGHER
Wall Street shrugs off slump in retail sales
Published: Wednesday, January 15, 2003 at 6:01 a.m.
Last Modified: Tuesday, January 14, 2003 at 9:33 p.m.
NEW YORK - Investors looked past a disappointing retail sales report Tuesday, sending stocks moderately higher as they awaited fourth-quarter earnings news to help determine the economy's strength.
"The market is going to be choppy for a while," said Barry Berman, head trader for Robert W. Baird & Co. "The market is looking for positive economic news indicating that things are picking up."
"On the other hand, there's a lot of money on the sidelines. People are looking for opportunities to come into the market, so you have a lot of crosscurrents," he said.
The Dow Jones industrial average gained 56.64, or 0.6 percent, to close at 8,842.62. Earlier in the day, blue chip stocks fell as much as 39 points.
The broader market also finished higher. The Nasdaq composite index climbed 14.95, or 1 percent, to 1,460.99.
The Standard & Poor's 500 index rose 5.40, or 0.6 percent, to 931.66.
The Commerce Department reported sales at the nation's retailers rose 1.2 percent in December as shoppers took advantage of incentives and drove up car sales by the largest amount in more than a year. That followed a solid 0.9 percent gain in November.
But excluding automobile sales, which can swing widely month to month, overall retail sales were flat in December, compared with a modest 0.3 percent gain in November.
Analysts said investors' ability to largely shrug off the news signaled a resiliency that bodes well for the market.
A.C. Moore, chief investment strategist for Dunvegan Associates in Santa Barbara, Calif., said often after a big rally such as the one in early January, the market tends to consolidate with sharp gains and losses. But Tuesday's movement was more sideways, a positive sign.
"We're experiencing a consolidation at a high level without a (pullback) reaction, which is an indicator of underlying strength," he said. "If you squint your eyes, you can see improving economic trends and high liquidity, conditions where markets tend to do a little better."
Berman said investors were watching earnings announcements closely to help gauge their next move.
"I think it's going to be a trading market, with movement based on the latest news, particularly with earnings reports and economic data coming out later in the week," he said.
The market got some good earnings news from Intel after the close of regular trading, as the chip maker reported it beat analyst expectations. Intel rose 19 cents in extended-hours dealings after gaining 41 cents to $17.79 during the regular session.
In regular trading, Alcatel climbed $1.32 to $7.15 after the company raised its fourth-quarter sales outlook. The news lifted other telecom stocks, including Lucent Technologies, which rose 3 cents to $1.84, and Cisco Systems, which gained 30 cents to $15.58.
Barr Laboratories Inc. rose $2.89 to $76.97 after the drug company raised its earnings outlook for its fiscal second quarter, citing higher sales.
Decliners included Wal-Mart, which dropped 13 cents to $51.41, after confirming it might buy Britain's fourth-largest supermarket chain, Safeway PLC, which already has attracted two other suitors.
Advancing issues outnumbered decliners about 3 to 2 on the New York Stock Exchange. Consolidated volume was light at 1.73 billion shares, lower than the 1.77 billion traded Monday.
The Russell 2000 index, a barometer of smaller company stocks, rose 2.27, or 0.6 percent, to 398.45.
Overseas, Japan's Nikkei stock average finished 1 percent higher Tuesday. In Europe, France's CAC-40 inched up 0.1 percent, Britain's FTSE 100 dipped 0.1 percent and Germany's DAX index gained 1.2 percent.
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