Stocks are Buoyed by Robust Retail Sales
Stocks started the trading session in the black after Monday’s drubbing which saw the major averages decline more than 1%. Retail sales came in slightly better than expected showing that consumption continues to drive growth. JP Morgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) both released 4th quarter earnings that were in line with expectations. Stocks surged with the Nasdaq composite leading the gains, wiping out all of Monday’s losses.
Retail sales climbed more than expected in December as consumers boosted purchases during year-end discounting. Headline retail sales increased 0.2 percent after a 0.4 percent rise November that was which was revised lower according to the Commerce Department. Economists had expected retail sales in December to rise 0.1 percent. Excluding auto, demand jumped by the most in almost a year. Retail sales excluding auto dealers climbed 0.7 percent in December.
Holiday sales were overall weaker than expected. During the Black Friday weekend, spending dropped for the first time since 2009 with merchants extending deep discounts, according to the National Retail Federation. Store traffic plunged 10.2 percent in the week ended December 7, 2013 compared with a 2.3 percent gain in the week after Thanksgiving in the prior year, according to ShopperTrak.
U.S. import prices were flat in December after declining the prior two months. Year over year the prices of goods and services imported into the U.S. were down 1.3%, according to the Labor Department. The monthly figure was below expectations. Economists surveyed had forecast a gain of 0.3% for overall import prices from November. Import prices excluding petroleum were also unchanged for December.
Wells Fargo reported an 11 percent rise in fourth-quarter profit, helped in the second half of the year. Net income rose to $5.37 billion, or $1.00 per share, from $4.86 billion, or 91 cents per share, a year earlier. Revenue fell to $20.67 billion from $21.95 billion a year ago.
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