Blowout Retail Sales Data Lifts Markets

S&P 500 erases early loss
By Newser Editors and Wire Services
Posted Feb 15, 2023 4:08 PM CST
Blowout Retail Sales Data Lifts Markets
A shop holds a sidewalk sale during an unseasonably warm day, Friday, Feb. 10, 2023, in Providence, Rhode Island.   (AP Photo/David Goldman)

Stocks closed slightly higher on Wall Street after a report showed US shoppers opened their wallets at stores last month by much more than expected, even as they contended with higher interest rates on credit cards and other loans. The S&P 500 eked out a gain of 0.3% Wednesday after erasing an early loss. The index rose 11.47 points to 4,147.60. The Dow Jones Industrial Average rose 38.78 points, or 0.1%, to 34,128.05. The Nasdaq composite rose 110.45 points, or 0.9%, to 12,070.59. The government said Wednesday that retail sales jumped 3% in January, after having sunk the previous two months. It was the largest one-month increase since March 2021, when a round of stimulus checks gave a big boost to spending, the AP reports.

Driving the gain was a jump in auto sales, along with healthy spending at restaurants, electronics stores, and furniture outlets. The surprising strength offers hope that the most important part of the US economy, consumer spending, can stay afloat despite worries about a possible recession looming, reports the AP. It’s the latest piece of data to show the economy remains more resilient than feared. But at the same time, the strong buying potentially adds more fuel to inflation, which a report earlier this week showed is cooling by less than expected. Upward pressure on inflation could force the Federal Reserve to stay more aggressive in keeping interest rates high.

"Will it lead to that traditional recession or a shallow recession, or will we power through it and have more strong growth with still-high rates?" asked Tom Hainlin, national investment strategist at US Bank Wealth Management. "That’s still the unknown." On Wall Street, shares of Airbnb jumped 13.4% Wednesday after the company reported stronger profit and revenue for its latest quarter than analysts expected. It also said trends remain encouraging into the new year, and it gave a forecast for revenue that topped Wall Street’s. On the losing end were stocks of energy producers, which dropped with the price of oil. One of the sharpest drops in the S&P 500 came from Devon Energy, which fell 10.5% after reporting weaker profit for the latest quarter than expected. (More stock market stories.)

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