Second straight record for DowBlue-chip index rallies on strength in oil and technology components; Nasdaq turns in six-year high, near 2,500.NEW YORK (CNNMoney.com) -- Stocks jumped Friday, sending the Dow to its second straight record close after a rally in technology and commodity shares. The Dow Jones Industrial Average (up 41.10 to 12,556.08, Charts) gained 0.3 percent, closing at an all-time high for the second session in a row.  
The S&P 500 (up 6.91 to 1,430.73, Charts) rose 0.5 percent, closing at its highest point since Nov. 2000. Meanwhile, the Nasdaq (up 17.97 to 2,502.82, Charts) composite gained 0.7 percent, closing at its highest point since Feb. 2001. All financial markets are closed Monday for the Martin Luther King Jr. Day national holiday. Stocks made most of their gains early in the day on a report showing surprisingly strong retail sales in December. "I think the retail sales report suggests that the consumer still has some strength left," said Alan Gayle, senior investment strategist at Trusco Capital Management. "It's causing the market to believe that the fourth quarter will prove to have been healthier than had been thought," continued Gayle. "This is encouraging for stock investors and had been giving bond investors some indigestion." Treasury prices slipped as investors bet that the strong retail report means the Fed isn't likely to cut rates anytime soon, boosting yields. Oil and gold prices rebounded after recent declines. But the gains didn't seem to bother stock investors and instead sparked a rally in the underlying stocks such as oil services and metals. Retail sales rise December retail sales rose 0.9 percent, the government reported Friday morning, topping forecasts for a rise of 0.7 percent. Sales excluding autos rose 1 percent in the month, beating economists' bets for a rise of 0.5 percent. The report confirmed the strength in other recent readings, serving to reassure investors that while the economy is slowing it may not be headed for recession, as had been feared in recent months. Yet, signs of a strong economy would seem to diminish the likelihood of the Fed cutting interest rates anytime soon, something investors had been hoping for. Growth that is too strong could increase the risk that the Fed will raise rates again before it can cut. However, one analyst said that there's room for stronger growth before deciding about Fed moves. "It's okay to have stellar growth without believing that the Fed is going to choke it off," said Robert Philips, chief investment officer at Walnut Asset Management. "The reason is that productivity increases - as a result of globalization - will keep a cap on inflation." "We ought to be able to grow at around 6 or 7 percent without the Fed raising rates," he added. Treasury prices slumped, boosting the yield on the benchmark 10-year note to 4.77 percent from 4.73 percent late Thursday. Bond prices and yields move in opposite directions. In currency trading, the dollar slipped versus the yen and euro, giving back early gains accrued after the release of the retail sales numbers. COMEX gold for February delivery surged $13 to settled at $626.20 an ounce. Oil prices rebound U.S. light crude oil for February delivery rebounded somewhat after its recent sharp slide, gaining $1.11 to settle at $52.99 a barrel on the New York Mercantile Exchange. Oil prices have been sliding since the start of the year in response to warm Northeast weather and decreased worries about a supply shortage. That's caused a selloff in oil stocks. But those stocks rebounded Friday, helping to lift the broader market. Valero Energy (up $1.91 to $50.57, Charts), Exxon Mobil (up $1.68 to $72.66, Charts), ConocoPhilips (up $2.01 to $63.83, Charts) and Sunoco (up $2.01 to $59.83, Charts) were among the oil stocks rising. The Amex Oil (up 34.10 to 1,126.96, Charts) index added more than 3 percent. A rally in metal and mining stocks lifted the Amex Gold Bugs (up $10.17 to $320.12, Charts) index by 3.3 percent. Silver gained too, with the iShares Silver Trust (up $4.90 to $127.80, Charts) index rising 4 percent. Among other movers, Advanced Micro Devices (down $1.92 to $18.26, Charts) slumped 9.5 percent after warning that fourth-quarter revenue won't meet estimates. Apple (down $1.18 to $94.62, Charts) declined on a news report that federal authorities are probing a falsely dated stock option grant awarded to CEO Steve Jobs. Apple shares had rallied more than 12 percent this week after the company unveiled its new iPhone, a cell phone that allows users to play music and surf the web. In the tech sector, Microsoft (Charts) gained on a report that Vista sales were strong in the first month on the market for the new operating system. Market breadth was positive. On the New York Stock Exchange, winners topped losers 2 to 1 on volume of almost 1.53 billion shares. On the Nasdaq, advancers beat decliners 3 to 2 on volume of nearly 2.16 billion shares. |
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