Wall Street surged today as investors looked past a sharp rebound in oil prices and focused on comforting news about the economy ...
NEW YORK — Wall Street surged today as investors looked past a sharp rebound in oil prices and focused on comforting news about the economy — better-than-expected retail sales and a drop in the number of laid-off workers seeking unemployment benefits.
The Dow Jones industrials gained 213.97 to 12,604.45.
Microsoft, one of the 30 Dow stocks, gained 76 cents to close at $28.30 a share. Boeing, also a Dow stock, fell 71 cents to $77.31.
Broader stock indicators also advanced. The Standard & Poor’s 500 index rose 26.85 to 1,404.05, and the Nasdaq composite index rose 46.80 to 2,549.94.
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The market got an additional boost from word that Verizon Wireless will acquire Alltel Communications for $5.9 billion in cash and the assumption of $22.2 billion in debt.
Not all of today’s news was positive, however. Even though the Labor Department said applications for unemployment benefits declined last week by 18,000 to 357,000, its four-week average rose to a four-month high.
Other worrisome developments included an almost $6 spike in crude oil prices to above $128 a barrel, a steep tumble by the dollar against the euro, rising bond yields, a record high in corn prices, and a Mortgage Bankers Association report showing that nearly 1 percent of mortgages fell into foreclosure between January and March.
Stock investors appeared to be ignoring today’s negative signals. Instead they were betting on an economic recovery later in the year.
Alfred Goldman, chief market strategist at Wachovia Securities, contends the market is entering a stronger period because of investors’ ability to not overreact to some bad news such as rising oil prices and a weak dollar and to focus instead on the retail sales and jobless claims numbers.
“What investors are doing is looking beyond the valley to the peaks ahead,” he said. “The big picture is that we’re in a market that’s transitioning from a bear to a bull.”
Stocks finished mixed Wednesday following sizable declines in the first two sessions of the week.
Among retailers reporting solid May results, Wal-Mart said sales at stores open at least a year rose as consumers sought bargains. Wal-Mart shares rose $2.12, or 3.7 percent, to $59.80.
Subodh Kumar, global investment strategist at Subodh Kumar & Assoc. in Toronto, said the jobs figures and the Verizon Wireless deal offer some investors reassurance about the health of the economy.
“It looks like the U.S. is not in recession but, I would say, tepid growth,” Kumar said.