U.S. stocks posted sharp gains Monday, following reports of strong Black Friday weekend sales and amid optimism that European leaders may be working toward a solution to the continent’s debt crisis.
The Dow Jones industrial average (INDU) soared 291 points, or 2.6%, the S&P 500 (SPX) added 34 points, or 2.9%, and the Nasdaq composite (COMP) rose 86 points, or 3.5%. The advance broke a 4-day losing streak for the Dow and seven consecutive days of declines for the S&P 500 and Nasdaq.
The rally was broad, with all 30 Dow components gaining ground. All but a small handful of the S&P 500 and Nasdaq were also trading higher.
Financials were among the biggest winners, with Morgan Stanley (MS, Fortune 500), Wells Fargo (WFC, Fortune 500), Citigroup (C, Fortune 500), Goldman Sachs (GS, Fortune 500), and JPMorgan Chase (JPM, Fortune 500) and surging between 2% and 6%.
The mood on Wall Street was cheerful after major retailers reported record sales of $52.4 billion over Black Friday weekend — up 16% from last year — according to a survey by the National Retail Federation released Sunday.
Black Friday surge won’t change ho-hum outlook
Retailers like Wal-Mart (WMT, Fortune 500), Kohl’s (KSS, Fortune 500), Costco (COST, Fortune 500), Target (TGT, Fortune 500), Gap (GPS, Fortune 500) and Home Depot (HD, Fortune 500) were up between 0.5% and 2.5%, while Best Buy (BBY, Fortune 500), Macy’s (M, Fortune 500), Tiffany & Co. (TIF) and Saks Inc. (SKS) climbed between 3% and 6%.
“Holiday sales seem to be off to a strong start, and that’s providing fuel to the market,” said Dave Hinnenkamp, CEO at KDV Wealth Management. “Stocks have been trading down for days now, so this is a bounce on good news, but I wouldn’t expect a straight-up rise from here.”
Hinnenkamp cautioned that investors will keep a close eye on the debt crisis in Europe, which could continue to spark jerky moves in the market.
“As long at Europe’s situation remains unresolved, we could see more volatility,” he said. “But once we have some finite news — a credible plan that deals with the problems rather than tinkering with the symptoms — we could see an up trend in stocks.”
Despite Monday’s healthy rise, the major indexes remain in the red for the month and the year. The Dow is down 3.6% in November, and 0.5% for the year. The S&P 500 and Nasdaq are off about 5% for the month and year.
Last week, European bond yields spiked following a series of disappointing debt auctions, which further heightened fears of a contagion in the region and sent stocks about 5% lower for the week.
CNN
