A wide swath of good news, from better-than-expected retail sales and worker-productivity figures to a major court victory for Merck &...
NEW YORK — A wide swath of good news, from better-than-expected retail sales and worker-productivity figures to a major court victory for Merck & Co., drove stocks higher Thursday, although a jump in oil prices limited the gains.
The Dow Jones industrial average rose 49.86 to 10,522.59.
Microsoft, one of the 30 Dow stocks, slipped 2 cents to close at $26.44 a share. Boeing, also a Dow stock, gained 80 cents to $65.50.
Broader stock indicators also moved higher. The Standard & Poor’s 500 index added 5.18 to 1,219.94, and the Nasdaq composite index climbed 15.91 to 2,160.22.
Most Read Stories
- Storm star Sue Bird says she's dating the Reign's Megan Rapinoe and opens up about being gay WATCH
- What drivers can and cannot do under Washington state's new distracted-driving law
- Illicit skatepark on Green Lake’s Duck Island: Cops called on bowl built in bird habitat WATCH
- '450 square feet of fear': Renter dreads rising cost for Fremont studio apartment | Seattle Sketcher
- Put down that cellphone; distracted-driving law is here
Wall Street’s inflation worries were mollified by the latest government report on productivity, which rose 4.1 percent in the third quarter, the biggest rise in a year. With workers more productive, they can be paid more without increasing the risk of inflation.
And while investors remain cautious about consumer spending this winter due to high heating prices, October’s retail-sales reports were generally stronger than expected.
Stock buyers received further encouragement by a report showing growth in the service sector. The Institute for Supply Management’s services index rose to 60 in October from 53.3 in September and three points better than economists had forecast.
Yet the market received a harsh reminder of the long-term problems the economy faces as oil prices surged $2.03 to settle at $61.78 per barrel on the New York Mercantile Exchange. The jump in oil ate into some of the market’s gains and brought to mind the high energy prices, inflation and expected drop in fourth-quarter consumer spending that lie in the future.
“That’s a lot of good news that’s driving the market today,” said Hugh Johnson, chief investment officer at Johnson Illington Advisers. “But it begs the question, who knows what the market will tell us tomorrow? It’s been an on-again, off-again market. Today it’s on-again.”
Investors received more reassurance after Federal Reserve Chairman Alan Greenspan said he was bullish on the economy, telling a congressional hearing the economic impact from the recent spate of hurricanes was temporary and that the economy remained sturdy. However, he said the Fed would keep a close watch on energy prices in case they spark broader inflation, which made the day’s good news all the more important on Wall Street.
“Everyone assumes the Fed is going to be coming at this economy with higher interest rates, so it’s nice to have a running start,” said Jack Ablin, chief investment officer at Harris Private Bank. “The better shape our economy is in, the better we’ll be able to withstand the rate hikes and avoid a hard landing.”
Investors’ improving take on the economy was furthered by the Labor Department’s weekly report on first-time unemployment claims, which neared their pre-Hurricane Katrina levels. Only 19,000 layoffs attributed to hurricane-related causes last week. A total of 323,000 new unemployment claims were filed, the lowest weekly total since before Katrina hit the Gulf Coast region.