NEW YORK - US stocks rose slightly on Thursday, pushing the Dow Jones industrial average to a record closing high for a third day and the S&P 500 to a fresh 5-1/2-year high, after an increase in retailers' September sales fuelled hopes that spending will stay strong.
The energy sector
was one of the best performers in both the blue-chip Dow average and the Standard & Poor's 500 Index, with investors buying some oil-related shares as crude prices climbed.
"The market is getting a lot of support from the energy sector, which has been badly battered," said Michael Metz, chief investment strategist at Oppenheimer & Co.
He also pointed out that "there's a feeling that people don't want to miss this rally, and they are hopping aboard."
US department stores and clothing retailers posted surprisingly strong September sales as falling petrol prices and cool weather spurred spending on fall fashions. The S&P retail index ended up 0.2 per cent.
The Nasdaq Composite Index got its biggest lift from coffee chain Starbucks, which reported higher-than-expected sales.
The Dow Jones industrial average rose 16.08 points, or 0.14 per cent, to 11,866.69, a record close. The Standard & Poor's 500 Index added 3.00 points, or 0.22 per cent, to finish at 1,353.22. The Nasdaq Composite Index advanced 15.39 points, or 0.67 per cent, to close at 2,306.34.
The Dow industrials hit a fresh record intraday high of 11,870.06, topping the record intraday high set on Wednesday.
In Thursday's session, the S&P 500 Index climbed to fresh 5 1/2-year high of 1,353.79.
Stock traders said investors avoided taking big positions a day after the Dow hit a record for a second straight day and on the day before the release of monthly employment data on Friday.
Target was among the retailers reporting a stronger-than-expected rise in September sales. Later in the session, the discount retailer said it would match its bigger rival Wal-Mart Stores new, lower prices on generic drugs in all Florida Target pharmacies.
Shares of Target rose 1.8 per cent, or US$1.05, to US$58.68, while shares of Wal-Mart slipped 2.3 per cent, or $1.14, to $48.41 on the New York Stock Exchange.
Wal-Mart's stock was the biggest drag on both the Dow and the S&P 500, helping to limit their gains. The world's biggest retailer affirmed its profit forecast despite lackluster September sales growth and said apparel demand was disappointing last month.
Starbucks was the Nasdaq's top-weighted gainer after it reported same-store sales that topped analysts' estimates. Its shares rose 7.6 per cent, or US$2.73, to US$38.69.
In Thursday's session, stocks opened lower, with the Dow and the S&P 500 adding to losses briefly around midday after Philadelphia Federal Reserve Bank President Charles Plosser said US interest rates may not be high enough to quell a recent bout of inflation.
The Fed raised its benchmark fed funds rate to 5.25 per cent from a historic low of 1 per cent over a two-year period that began on June 30, 2004. But the central bank paused in August this year to assess the effects of its tightening of monetary policy on the economy.
But by mid- to late afternoon, the Dow and the S&P 500 shifted gears and registered modest gains as investors bought some oil-related shares.
Crude oil futures rose, reversing a sharp drop in prices since July that had fuelled a stocks rally and ultimately pushed the Dow industrials to a fresh record earlier this week.
Opec officials said the cartel will cut production by 1 million barrels per day as soon as possible to help lift slumping prices. November crude gained 62 cents to settle at $60.03 a barrel on the New York Mercantile Exchange.
Exxon Mobil shares rose 1.1 per cent, or 71 cents, to $67.32 on the NYSE. The stock was the biggest contributor to the S&P 500's gain, while it was also among the Dow's major advancers.
An S&P index of oil companies' shares rose 1.1 per cent.
The Dow industrials were led higher by Caterpillar, the heavy equipment maker, whose shares rose 4.1 per cent, or US$2.70, to US$68.24, followed by Altria Group, the parent of the companies that make Oreo cookies and Philip Morris cigarettes, with its stock up nearly 2 per cent, or US$1.50, at US$78.40 on the NYSE.
Shares of 3M, an industrial conglomerate whose products include Scotch tape and Post-It Notes, added 1.4 perent, or US$1.05, to US$75.92, and also contributed heavily to the Dow's advance.
Trading was active on the NYSE, with about 1.74 billion shares changing hands, above last year's daily average of 1.61 billion, while on Nasdaq, about 1.99 billion shares traded, above last year's daily average of 1.80 billion.
Advancing stocks outnumbered declining ones by a ratio of about 2 to 1 on both the NYSE and the Nasdaq.
(Additional reporting by Meredith Davis)
- REUTERS
NEW YORK - US stocks rose slightly on Thursday, pushing the Dow Jones industrial average to a record closing high for a third day and the S&P 500 to a fresh 5-1/2-year high, after an increase in retailers' September sales fuelled hopes that spending will stay strong.
The energy sector
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