NEW YORK (TheStreet) -- Rising momentum for stocks on Thursday all but erased the punishing losses sustained over Wednesday's session. The S&P 500 spiked 1.3% as retail sales increased at a faster-than-expected rate.
Benchmark indices had suffered three straight days of losses, weighed down by the energy sector as commodity prices crashed.
The Dow Jones Industrial Average added 1% on Thursday and the Nasdaq popped 1.5%.
Overall retail sales climbed 0.7% in November, its largest gain since March, compared to forecasts for a 0.4% increase. Core retail sales, excluding automobiles, gasoline and food services, rose 0.6%.
Increased consumer spending in November validated what economists assured traders would happen since a crash in crude oil sparked broad market selloffs: lower gasoline prices would fuel consumer confidence to spend, a more important measure of economic health given consumer spending contributes more than two-thirds of GDP.
"If there were any doubts about the U.S. consumer, November retail sales have put those to rest," Wells Fargo senior economist Eugenio Aleman wrote in a note. "The decrease in gasoline prices over the past several months continues to be a bounty for consumers ... October and November retail sales numbers are a confirmation of what it is going to be, perhaps, a very good end of the year."
Weekly jobless claims slipped to 294,000, slightly lower than an estimated 295,000 claims. The weekly measure fuels further confidence in a tightening job market after nonfarm payrolls for last month came in at a three-year high with 321,000 U.S. jobs added.