US CLOSING PRICES: Dow Jones 8515.55 (+47.07) S&P 500 872.80 (+4.65) Nasdaq 1530.24 (+5.34)WALL STREET put together a moderate advance in light trading yesterday after the finance arm of General Motors won a government lifeline, but dreary Christmas spending figures dashed the chance of a big year-end rally.
Not surprisingly, Americans spent much less on gifts this season than they did last year, according to SpendingPulse, a division of MasterCard Advisors.
Retail sales dropped between 5.5 per cent and 8 per cent compared with last year, the figures showed, or between 2 per cent and 4 per cent after stripping out car and oil sales.
Personal consumption is a huge part of US economic activity, comprising more than two-thirds of gross domestic product, so Wall Street is nervous that a more frugal consumer could keep the economy weak in 2009.
Investors did get a some good news on Christmas Eve, when the Federal Reserve allowed GMAC Financial Services - the finance arm of struggling Detroit carmaker General Motors - to become a bank holding company and thus qualify for the government's $700 billion rescue fund. Analysts had said that without financial help, GMAC might have had to file for bankruptcy protection or shut down.
There was little conviction behind the Wall Street advance, which the market managed after stocks meandered for much of the session. With just three full trading days left in the year, no news has been upbeat enough to spark a big year-end rally, a consequence of the great uncertainty still in the market.
The Dow Jones industrial average rose 47.07, or 0.56 per cent, to close at 8,515.55. Broader stock indicators also rose. The Standard Poor's 500 index rose 4.65, or 0.54 per cent, to 872.80, and the Nasdaq composite index rose 5.34, or 0.35 per cent, to 1,530.24. The Russell 2000 index of smaller companies rose 6.28, or 1.33 per cent, to 476.77.
- (AP)
