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Stocks up slightly on strong retail results
Stocks resembled summer vacationers yesterday, rising not-too-impressively in the morning and then mostly laying around for the rest of the day. Positive news from retailers was the main reason US indexes posted small gains. Apple helped too by hitting a new high. Traders in both the US and Europe are on vacation, so volumes were low. And the dog days continued for Facebook. A four per cent decline left its shares at about half the price of its May initial public offering.
The Dow Jones industrial average rose 25.09 points to close at 13,275.20. The Standard & Poor’s 500 index rose 2.65 points to close at 1,418.16. The Nasdaq rose 14.20 points to close at 3,076.59. The modest gains put some indexes close to their highs for the year. The Dow is now within four points of 13,279, its high for the year set on May 1. The S&P 500 is within one point of its four-year high set on April 1.
The Dow has now risen eight out of the last 11 days and finished the week up a half-per-cent. The Dow is sporting a gain for the year of almost 8.7 per cent for the year, while the S&P 500 is up almost 12.7 per cent. Next week is likely to be more eventful.
Investors will get Chinese housing reports, minutes from a closely-watched Federal Reserve meeting, and jobless claims. And Europe’s problems, which were mostly off centre stage in recent days, return front-and-centre as German Chancellor Angela Merkel meets in Berlin with Greek Prime Minister Antonis Samaras to talk about progress in overcoming Greece’s debt crisis.
“Next week, you have somebody say something that no one expects, in thin trading it could really move markets around,” said John Canally, investment strategist at LPL Financial. Strong retail earnings and outlooks drove yesterday’s gains. Gap Inc shares rose 4.8 per cent after it boosted its outlook and posted a 29 per cent jump in net income. That suggests the operator of Gap, Old Navy and Banana Republic stores is finally on the way to a turnaround.
Technology stocks saw both highs and lows yesterday. Apple hit an all-time high, rising almost two per cent to US$648.11. It now has a market value of about US$608 billion, almost 50 per cent higher than No 2 Exxon Mobil at US$408 billion. But declines continued for Facebook and Groupon, the online coupon company.
Facebook closed at US$19, about half the value of its initial public offering price of US$38. Investors are worried that mobile ads won’t bring in as much money as those seen on desktop computers. And Facebook’s short-term problems include the expiration of a lock-up period on Thursday that had kept early investors from selling.
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