Stocks Finish Higher

Economic data eases inflation worries, as overseas markets rallied

Stocks finished solidly higher Thursday, after a tame rise in the October personal consumption figure eased inflationary worries. A few more economic reports were released, as well as November sales results from retailers.

The Dow Jones industrial average climbed 106.70 points to 10,912.57. The broader Standard & Poor's 500 index was up 15.26 points, to 1,264.74. The tech-heavy Nasdaq composite index gained 34.35 points to 2,267.17.

January West Texas Intermediate crude oil settled up $1.11 cents at $58.43 a barrel, following yesterday's report showing a much larger draw in crude inventories.

The main event Friday is the release of the employment report. Nonfarm payrolls is expected to rebound by 209,000 in November. The rise in payrolls comes after depressed readings in September and October, as hurricane distortions are gradually reversed, says Action Economics. The unemployment rate is expected to hold at 5.0%.

In economic news Thursday, the headline November ISM index -- a guage of manufacturing activity -- came in at 58.1, in line with economist estimates after a stronger-than-expected reading of 59.1 in October. "We will continue to assume a 60 reading for the ISM non-manufacturing index in November" as well, says Action Economics, although "the 'rebuild jolt' that boosted the indexes to the October peak readings should gradually unwind to leave still-strong numbers in the 55 area by the second quarter of next year."

U.S. personal income rose 0.4% in October after a 1.7% surge in September, while spending was up 0.2% following a 0.5% increase in September. The core PCE price deflator was up 0.1% on the month after a 0.2% increase in September. The year-over-year rate slowed to 1.8% from 2.0%.

Jobless claims fell 17,000 in the week ended Nov. 26, after jumping 32,000 to 337,000 the prior week. That left the 4-week moving average at 322,500, from 323,750 previously. The BLS said the hurricanes accounted for about 9,600 claims.

Retailers came out with November sales figures this morning. Wal-Mart Stores (WMT ) reported that same-store sales rose a firm 4.3%.

Among the apparel chains reporting strong sales were Abercrombie & Fitch (ANF ), which said same-store sales jumped 23% and total sales rose 34% in November.

However, American Eagle Outfitters (AEOS ) posted lower-than-expected 1.7% increase in November same-store sales, and 6.9% increase in total sales. The retailer trimmed 73-75 fourth-quarter earnings per share estimate to 70-72 cents, which includes a tax charge of about 2 cents for repatriation of foreign earnings.

Gap (GPS ) posted 4% lower November same-stores sales and flat total sales.

In Europe, London's FTSE-100, Germany's DAX, and France's CAC-40 indexes were trading higher after the European Central Bank raised its key interest rate by 25 basis points to 2.25%, as expected.

In Asia, Japan's Nikkei index soared 258.35 points (1.74%) to 15,130.5, after the Organization for Economic Cooperation and Development upgraded its outlook for Japan's economy, reigniting optimism toward growth. The Hang Seng index climbed 130.89 points (0.88%) to 15,068.03.

Treasury Market

Treasury yields pushed higher Thursday, as economic data pointed toward a strong economy and stocks surged. From lows near 4.465% on the 10-year note, the yield finished higher at 4.53%.

Before it's here, it's on the Bloomberg Terminal.