Dow Gains for 9th day as IBM Jumps Into Record Territory
NEW YORK (TheStreet) -- Major U.S. stock markets gained on Wednesday as higher-than-expected retail sales boosted the outlook for the world's largest economy, and helped lift share prices of familiar consumer brands like Netflix (NFLX), Staples (SPLS) and Walgreens (WAG).
The S&P 500 closed up 0.13% to 1,554.52 while the Nasdaq was higher by 0.09% to 3,245.12.
The Dow Jones Industrial Average added 5.22 points, or 0.4% at 14,455.28, to finish in positive territory for the ninth consecutive trading day, its longest winning streak in 16 years.
Netflix (NFLX) shares jumped 5.6% to $192.31 after the online video streaming company announced the addition of social media features aimed at attracting users to link their accounts to Facebook (FB ) to tell friends what they've been watching on Netflix. Facebook shares dropped 2.6% to $27.10.Walgreen (WAG) shares advanced 4.2% to $42.78 after UBS raised its rating to "buy" from "neutral." UBS said the drugstore operator should grow during the next two years, and the recent weakness in the shares represents an attractive entry point. The market's advance came after the U.S. Census Bureau said retail sales in February grew 1.1% over the same period a year ago, more than economists were expecting. January data was also revised upward to 0.2%. Ron Florance, managing director of investment strategy for Wells Fargo Private Bank, said consumers appear to have withstood recent tax increases as well as the sequester. "I think they're just feeling better,'' Florance said today in a phone interview from Scottsdale, Arizona. "They're feeling better about their job security, they're feeling better about their income, they're feeling better about the house they live in, and they're not spending as much time paying attention to the dysfunction in Washington." Better U.S. economic data does raise the possibility that inflation is rising, a development which could prompt the Federal Reserve to pull back from its stimulus program, he added. "We've been in a relatively benign inflationary environment since the recession, and we think that's about to change,'' Florance said in the interview. "Investors and consumers should be prepared for that." Shares of IBM (IBM), the information technology company, reached a record high on Wednesday at $212.36, before closing up 0.72% at $212.06. Shares have gained 11 percent this year. The company's market cap is now valued at $236.95 billion. Dole Food (DOLE) tumbled 9% to $10.67 after the company reported a wider-than-expected fourth-quarter loss and a substantial miss on revenue expectations, driven by declining fresh fruit sales amid weakness in the banana market and costs related to the sale of units in Germany and Spain. U.S. inflation data will be released on Thursday with Consumer Price Index coming on Friday. On Wednesday, the Bureau of Labor Statistics reported that its price index for U.S. imports rose 1.1% in February after increasing 0.6% the previous month, with both of the monthly rises driven by higher fuel prices. U.S. export prices advanced 0.8% in February after a 0.3% increase in January, the Federal agency said. In other economic news, the Census Bureau said business inventories rose by 1% in January, the strongest increase in more than 18 months. Gold for April delivery tumbled $3.3 to settle at $1,588.40 an ounce at the Comex division of the New York Mercantile Exchange, while April crude oil futures fell 2 cents to $92.52 a barrel. The benchmark 10-year Treasury was falling 2/32, raising the yield to 2.028%. The dollar was rising 0.39%, according to the U.S. dollar index. The FTSE 100 in London shed 0.45% while the DAX in Germany closed up 0.06%. Hong Kong's Hang Seng index settled off 1.46% and Japan's Nikkei closed down 0.61%. Coach (COH) shares rose 1.8% to $49.67 after Citi hiked its recommendation on the luxury handbag maker to "buy" from "neutral," explaining that it has transitioned to a value stock from a growth stock and that risk tied to the company has largely been priced into shares. Express (EXPR) shares declined 3.2% to $18.25 after the Columbus, Ohio-based retailer projected weaker-than-forecast full-year 2013 and first-quarter earnings, reflecting reduced customer traffic and spending in February. The company expects 2013 earnings of $1.40 to $1.54 a share compared with $1.56 a share last year. First-quarter earnings estimates were 34 cents to 38 cents a share, vs. 47 cents a share the same time a year ago. Spectrum Pharmaceuticals (SPPI) tumbled 37.3% to $7.79 after warning that sales of its colon cancer drug Fusilev will be $10 million to $15 million in the first quarter and $80 million to $90 million for all of 2013. Google (GOOG) slipped 0.28% to $825.31 after agreeing to pay a $7 million fine to 38 states tied to the company's interception of emails, passwords and other sensitive personal information through its Street View project. Velti (VELT) was plunged 22.8% to $2.40 after reporting a fourth-quarter loss of more than $5 million and projecting 2013 sales of $255 million to $280 million, short of analysts' projections of $340 million. Discover Financial Services (DFS) shares rose 2.2% to $43.06 on news the company plans to start offering home-equity loans in the second half of 2013 to benefit from the improving housing market. -- Written by Andrea Tse and Joe Deaux in New York.
>To contact the writer of this article, click here: Andrea Tse.
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