Stocks Finish Higher on Return of European Optimism
NEW YORK ( TheStreet) -- Stocks finished Thursday in positive territory as improved European headlines overshadowed poor U.S. economic data.
Before the opening bell, two reports on the U.S. economy stole some of the focus away from Europe before improving news from the region began taking back some of the spotlight. The Commerce Department said that U.S. retail sales for December slumped to their weakest read since May 2011. Sales rose 0.1% in December, compared to a revised 0.4% rise in November. Economists had expected sales to rise 0.3% with the help of discounts during the holiday season. Retail sales excluding car sales dropped for the first time since May 2010, declining 0.2% in December after rising 0.3% in the prior month.Business inventories also came in lower than expectations for December. The Commerce Department said that inventories rose 0.3%, compared to the 0.4% gain forecasted. The increase extends a 0.8% gain from October. Initial jobless claims in the first week of January bounced up near 400,000. The Labor Department said that claims rose by 24,000 to 399,000, was slightly higher than economists' expectations for 375,000, according to a poll by Thomson Reuters. The prior week's figure was upwardly revised to 375,000 from 372,000. In Europe, positive outcomes from government debt sales were fueling hopes that the region could deal with its high borrowing costs. Spain sold 9.89 billion euros of bonds maturing within the next four years after setting a goal of selling 5 billion euros. Meanwhile, Italy sold off 8.5 billion euros of one-year bills at a yield of 2.735%, down from 5.952% in a similar auction held last December. Before the opening, both the Bank of England and the European Central Bank kept key interest rates steady, as economists had expected. Germany's DAX finished up 0.44% while London's FTSE closed down 0.15%. Japan's Nikkei Average settled 0.74% lower, and Hong Kong's Hang Seng was down 0.3%.
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