Wall Street buoyed by upbeat retail sales

Dow Jones: 12,062.26 (+20.29) S&P 500: 1,307.10 (+3.07) Nasdaq: 2,753.88 (+4.32)US STOCKS ended near the session's highs yesterday, with investors favouring shares of retailers after encouraging chain-store sales raised confidence ahead of today's jobs report.

The Morgan Stanley retail index rose 2.8 per cent, driven by companies such as Sears, up almost 8 per cent, and Ross Stores, up 6 per cent and at a new high.

US chain-store sales climbed 4.8 per cent in January. Along with rising service-sector activity and improved jobless claims figures, the stronger-than-expected retail figures added to growing evidence of an economic rebound.

“The strength in the retail sector is probably the standout feature today,” said Nick Kalivas, an analyst at MF Global in Chicago. “You have generally a profit-taking, consolidative market after a couple of days of big run-ups (and) in front of the employment report tomorrow.”

The wider market had come under pressure for most of the day as some investors said stocks were extended after weeks of gains, while a stronger dollar weighed on the natural resource sector.

The Dow Jones industrial average gained 20.29 points, or 0.17 per cent, to 12,062.26.

The S&P’s 500 Index rose 3.07 points, or 0.24 per cent, to 1,307.10.

The Nasdaq Composite Index added 4.32 points, or 0.16 per cent, to 2,753.88.

The S&P 500 has rallied more than 10 per cent since breaking out of a trading range at the start of December and is up 21 per cent since the end of August.

Data showed the US services sector grew in January at its fastest pace since August 2005.

The strong performance in retail shares comes ahead of today’s employment report that is expected to show the US economy added 145,000 jobs in January.

Also in the retail sector BJ’s Wholesale Club said it may put itself up for sale. Shares of BJ’s, which is under pressure from a private equity firm that may make a hostile bid, jumped 12.2 per cent to $48.25.

Clashes continued in Egypt, adding to concern that has pressured equities recently.

Merck fell 2.7 per cent to $32.90 and was the top drag on the Dow after the drugmaker forecast 2011 earnings below Wall Street forecasts. – (Reuters)