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U.S. stocks rise on retail sales data, Fed eyed; Dow up 0.35%

Published 03/13/2012, 10:17 AM
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Investing.com - U.S. stock markets were higher on Tuesday, amid optimism over the U.S. economic outlook after data showed retail sales rose at the highest pace in five months in February, while markets awaited the outcome of a Federal Reserve policy meeting later in the day.

During early U.S. trade, the Dow Jones Industrial Average rose 0.35%, the S&P 500 index added 0.45%, while the Nasdaq Composite index climbed 0.5%.

Official data showed that U.S. retail sales rose to the highest level in five months in February, increasing by a seasonally adjusted 1.1%, in line with expectations.

Core retail sales, which exclude automobile sales, rose by 0.9% last month, above expectations for a 0.8% gain.

Traders now shifted their attention to the outcome of a Federal Reserve policy meeting later in the day, amid diminished expectations for a fresh round of asset purchases to help stimulate economic growth.

Financial sector stocks led gains, tracking their global counterparts higher, after euro zone finance ministers said that Greece would receive formal approval for its second bailout later this week.

JP Morgan saw shares climb 1.1%, Citigroup shares rose 2.3%, while investment banks Morgan Stanley and Goldman Sachs jumped 1.6% and 2.5% respectively.

Midas saw shares soar 27.5% after it agreed to be acquired by privately-held replacement tire company TBC Corporation in a deal valued at nearly USD310 million. The price tag represents a 28% premium over Midas' closing level on Monday.

Shares in Great Wolf Resorts rallied 22% after investment group Apollo Global Management said it would purchase the water-park operator for about USD703 million.

On the downside, clothing retailer Urban Outfitters tumbled 6.25% after reporting lower-than-expected fourth quarter earnings after Monday’s closing bell.

Yahoo shares dipped 0.2% after saying late Monday that it is suing social media website Facebook in a California court, alleging the infringement of multiple patents.

Across the Atlantic, European stock markets were broadly higher, with indices extending gains after data showed that German economic sentiment improved to the highest level since June 2010 this month.

The EURO STOXX 50 rallied 1%, France’s CAC 40 jumped 1.05%, Germany's DAX advanced 0.75%, while Britain's FTSE 100 added 0.65%.

European markets shrugged off worries over Spain’s fiscal health. The country faced calls from European leaders to make deeper budget cuts, amid concerns that the region’s debt crisis could flare up after the country’s prime minister raised the deficit target earlier this month.  

During the Asian trading session, Hong Kong's Hang Seng Index added 1%, while Japan’s Nikkei 225 Index eased up 0.1%.

The Nikkei trimmed gains after the Bank of Japan refrained from boosting its asset buying program after unexpectedly adding JPY10 trillion in stimulus last month.

Also Tuesday, government data showed that U.S. business inventories rose more-than-expected in January.

A separate report showed that consumer confidence in the U.S. declined unexpectedly in March, deteriorating for the first time in seven months.

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