Small caps rally on retail sales
The Russell 2000 (NYSE: IWM) is soaring on news of surprisingly strong January U.S. retail sales.
At 1:02 p.m. ET, the small-cap index had added 10.33 points, or 1.46%, to 715.81. The Dow Jones Industrial Average (INDU) was up 97.38 points, or 0.79%, to 12,470.79.
Wall Street is enjoying a lift as news of better-than-expected U.S. retail sales in January relaxes fears of a recession.
Retail sales rose 0.3% to $382.9 billion in January, the U.S. Commerce Department reported before the start of trading. The results beat economists’ forecast of a 0.2% decline and represent an improvement over December’s 0.4% drop.
Sales excluding autos also increased 0.3%, more than the projected 0.2%. Sales excluding gasoline rose just 0.1%.
The numbers are good news for those worried that a pullback in consumption that will send the economy into recession. Consumer spending is about 70% of U.S. gross domestic product.
Breaking down the data, furniture sales fell, as did sales of electronics. Department store sales also declined, while sales of motor vehicles and parts increased.
A report by the Commerce Department after the opening bell said that business inventories climbed by a greater-than-expected 0.6% in December, while business sales fell 0.5%.
Sales at Blue Nile Inc. (Nasdaq: NILE) are rising, but shares of the Seattle-based online retailer diamonds and jewelry are falling on news that the $111.9 million reported for the fourth-quarter are below the $113.2 million projected by analysts.
On the flip side, drybulk shipper OceanFreight Inc. (Nasdaq: OCNF) is rising on news that it swung to a fourth-quarter profit.
Shares of LECG Corp. (Nasdaq: XPRT) are also up despite news that the Emeryville, Calif.-based company, which provides analytical and consulting services, swung to a fourth-quarter loss due to charges from the sale of a subsidiary.
