Stocks finished higher on Friday in a late-session rally as traders drew confidence from strong U.S. retail sales and consumer sentiment numbers, as well as some positive earnings news. The major indexes were also bolstered by heavy inflows to mutual funds, reports Standard & Poor's MarketScope.
The Dow Jones industrial average finished up 69.17 points, or 0.66%, to 10,539.01. The broader Standard & Poor's 500 index added 10.69 points, or 0.91%, to 1,184.17. The Nasdaq composite index gained 24.07 points, or 1.17%, to 2,085.34.
In economic news, retail sales rose 0.2%, in-line with median estimates, while sales excluding autos jumped 0.9%, exceeding estimates. The number implies both upward revision to third-quarter consumption and a slightly better outlook for the fourth quarter, says Action Economics.
The preliminary figure for the University of Michigan Consumer Sentiment index rose to 95.5, from 91.7 in October, and higher than expected.
Next week on the economic calendar is data from the October Federal budget on Monday, the October producer price index and November Housing Market index numbers on Tuesday, and the October consumer price index on Wednesday.
Further ahead on the earnings calendar, look for announcements by Lowe's Companies (LOW) and Jo-Ann Stores on Monday; Staples (SPLS), Hewlett-Packard (HPQ), Home Depot (HD), and Wal-Mart (WMT) on Tuesday; Medtronic (MDT) and Intuit (INTU) on Wednesday; and Gap (GPS), Walt Disney (DIS), and Novell (NOVL) on Thursday.
In the energy markets Friday, December NYMEX crude oil fell 10 cents to $47.32 a barrel, as traders squared their positions for the weekend after a steep drop on Thursday.
A healthy outlook from Dell (DELL) helped to focus buyers' attention on large cap Nasdaq tech stocks on Friday, but among the biggest percentage gainers in the S&P 500 were basic material stocks, led by steel and metals and mining issues. Gold futures hit a 16-year high, benefiting from continued weakness in the dollar, according to Standard & Poor's MarketScope.
In corporate news, FedEx (FDX) announced that the Dept. of Transportation is demanding that the its air shipping unit repay $29 million in excess funds received after the September 11 terrorist attacks. FedEx says it will contest the demand, and still expects to maintain its current earnings projections.
Delta Airlines (DAL) pilots ratified a new contract, including paycuts and benefits changes, saving the company $1 billion in long-term, annual savings. Shares moved 10% higher.
Among the earnings announcements after the market close Thursday, PC maker Dell (DELL) announced third-quarter earnings of 33 cents, vs. 26 cents a share a year ago, meeting average estimates. Shares traded 8.5% higher.
Pixar (PIXR) posted impressive third-quarter earnings Friday, showing 38 cents per share, vs. 23 cents a year ago, and beating Wall Street estimates by 14 cents a share. The stock went up 8.4% and hit a fresh all-time high.
Agilent (A) posted earnings of 15 cents a share, vs. 3 cents a year ago, falling well below Wall Street expectations. Shares declined 12.6%.
Kohl's (KSS) announced third-quarter earnings of 42 cents per share, vs. 35 cents a year ago, in line with analyst estimates. The retailer says same-store sales rose 1.2%, and gross margins increased to 35.9% from 34.1%. Kohl's moved 2.3% lower.
Hormel Foods (HRL) raised its fourth-quarter guidance Friday, citing a better-than-expected turkey market. Hormel stock rose 10%.
Treasury prices shrugged off the positive U.S. economic reports, sending yields down as European and Japanese third-quarter GDP numbers slowed due to higher oil prices, according to Standard & Poor's Marketscope. The benchmark 10-year note yield fell to 4.20%.
Any upturn by the dollar due to the positive retail sales and the sentiment numbers has been minimal. The dollar weakened, pushing to just under the $1.30 per euro mark.
European stock markets finished slightly higher Friday, as Eurozone gross domestic product (GDP) rose 0.3% in the third quarter, down from 0.5% in second quarter and the slowest pace in a year. London's Financial Times-Stock Exchange 100 index was up 17 points, or 0.4%, to 4,794, as traders squared off positions for the weekend.
Germany's DAX index went up 13 points, or 0.3%, to 4,144. In Paris, the CAC 40 index rose 1 point, moving to 3,835, amid a report that France's third-quarter GDP grew only 2% year-over-year, the slowest growth in 5 quarters.
In Asia, the markets finished higher on Friday. Japan's Nikkei 225 index rose 173.06 points, or 1.6%, to 11,019.98, boosted by a rally on Wall Street overnight and lower oil prices. Investors ignored the weaker-than-expected Japanese GDP data of a 0.1% real growth in the July-September quarter due to mixed opinions on the economic outlook, says Standard & Poor's MarketScope.
In Hong Kong, the Hang Seng index climbed 159.95 points, or 1.17%, to close at 13,784.46, tracking gains seen in the U.S.