World stocks lifted by US retail sales data

AP News
Posted: Nov 16, 2009 11:12 AM

World stock markets pushed higher Monday after figures showed U.S. retail sales _ which are crucial for the global economic recovery _ rose more strongly than anticipated in October.

In Europe, the FTSE 100 index of leading British shares was up 90.71 points, or 1.7 percent, at 5,387.09. Germany's DAX rose 116.96 points, or 2.1 percent, at 5,803.79 while the CAC-40 in France was 56.36 points, or 1.5 percent, higher at 3,862.37.

On Wall Street, the Dow Jones industrial average was up 130.82 points, or 1.3 percent, at 10,401.29, while the broader Standard & Poor's 500 futures rose 16.64 points, or 1.5 percent, to 1,110.12.

The gains came after the Commerce Department reported that U.S. retail sales rose 1.4 percent in October from the previous month. Though higher than analysts' expectations for a 0.8 percent advance, it was not enough to offset September's revised 2.3 percent decline _ originally the fall was estimated at 1.5 percent.

And excluding auto sales, retail sales rose 0.2 percent, half of the expected 0.4 percent increase.

Despite the dependence on car sales and the bigger than anticipated fall in September, markets extended their earlier gains, as investors focused in on the October rebound. Retail sales are particularly important when assessing the outlook for the global economy _ without the help of U.S. consumer spending, which accounts for around 70 percent of the U.S. economy, any global economic recovery will be modest.

"The October retail sales numbers were a very mixed bag, but signal that despite the consumer's gloomy mood, spending is improving," said Nigel Gault, chief U.S. economist at IHS Global Insight.

The retail sales data came in the wake of a raft of encouraging quarterly reports Friday from large U.S. chains, including clothing retailer Abercrombie & Fitch Co. and department-store chain J.C. Penney Co.

Retailers will continue to dominate the earnings calendar in the U.S. this week, too. Those expected to report include Home Depot Inc., Target Corp. and Gap Inc.

Home improvement retailer Lowe's Cos. kicked off the week's retailing earnings. Though its third-quarter profit dipped 30 percent, it matched expectations. And despite the declining earnings, Lowe's said it is seeing stabilization in some of the hardest-hit housing markets.

Stock markets have rallied strongly since March's lows, with many of the world's major indexes trading at, or near, their highest levels this year as investors reined in their economic doomsday expectations to factor in a swifter than anticipated global economic rebound.

Earlier, Japan's Nikkei 225 stock average closed up 0.2 percent at 9,791.18 after figures showed the Japanese economy expanded at an annual rate of 4.8 percent in the third quarter. That was the second straight quarter of expansion and the biggest rise since 2007.

In greater China, Hong Kong's Hang Seng rose 1.7 percent to 22,943.98, and Shanghai's benchmark surged 2.7 percent to 3,275.05. Markets in South Korea, Taiwan, Singapore and Australia rose between 1 percent and 2 percent.

Oil prices rose in tandem with stocks. Benchmark crude for December delivery was up 76 cents at $77.11 a barrel; the contract settled down 59 cents at $76.35 on Friday.

Meanwhile, the euro was up 0.4 percent at $1.4977 while the dollar was down 0.3 percent at 89.29 yen.


AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.