Retail and Employment Data Spark Market Gains

Wall Street rose sharply today after investors got some comforting news about the economy — a drop in the number of laid-off workers seeking unemployment benefits and some better-than-expected retail sales in May. The Dow Jones industrials rose more than 140 points.The market got an additional boost from word that Verizon Wireless will acquire Alltel Communications LLC for $5.9 billion in cash and the assumption of $22.2 billion in debt.The Labor Department’s report that applications for unemployment benefits came in at 357,000 — a decline of 18,000 from the previous week — offered investors some relief about the health of the job market a day ahead of a key monthly reading.While the weekly readings can show volatility, the latest drop left applications for benefits at their lowest level since mid-April. Still, the four-week average for those getting benefits rose to 3.086 million, the highest since March 2004.Among retailers reporting solid May results, Wal-Mart Stores Inc. said sales at stores open at least a year rose as consumers sought bargains.A global investment strategist at Toronto, Subodh Kumar, said the jobs figures and the Verizon Wireless deal offers some investors reassurance about the health of the economy.“It looks like the U.S. is not in recession but, I would say, tepid growth,” he said, adding that the Verizon-Alltel deal is “encouraging.”“Companies are willing to invest in their businesses,” Mr. Kumar said.In midday trading, the Dow rose 143.05, or 1.15%, to 12,533.53.Broader stock indicators also rose. The Standard & Poor’s 500 index advanced 16.45, or 1.19%, to 1,393.65, and the Nasdaq composite index rose 32.44, or 1.30%, to 2,535.58.Stocks finished mixed yesterday following sizable declines in the first two sessions of the week.Bond prices fell Thursday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.02% from 3.98% late yesterday. The dollar was mixed against other major currencies, while gold prices fell.Light, sweet crude oil rose $1.75 to $124.05 a barrel on the New York Mercantile Exchange.The weekly jobs report came as investors continue to grapple with concerns about tightness in the credit market, the effect of still-high energy prices and a slumping housing market.With the weekly jobs numbers in hand, Wall Street was looking ahead to the Labor Department’s monthly employment reading, due tomorrow morning. That report often draws widespread attention because a spike in unemployment could upend consumer spending, which accounts for more than two-thirds of American economic activity.“I think tomorrow will be somewhat of a similar kind of a day in the sense that if the news is at or above expectations I think investors may be willing to buy in,” Mr. Kumar said, referring to tomorrow’s employment report.In corporate news, Verizon Communications Inc. rose $2.19, or 5.9%, to $39.17 after the announcement of the deal with Alltel. Verizon Wireless is a joint venture between Verizon Communications and Vodafone PLC. Alltel was sold to TPG Capital and a unit of Goldman Sachs Group in a $27.5 billion leveraged buyout about seven months ago.If completed, the deal would push Verizon Wireless past AT&T Inc. to become the biggest operator in America.Continental Airlines Inc. rose 77 cents, or 5.2%, to $15.25 after announcing plans to cut 3,000 jobs and reduce its capacity in the fourth quarter by 11% as it grapples with surging jet fuel prices. Company officials said the industry’s business model “doesn’t work with the current price of fuel.”Wal-Mart said its May same-store sales rose 4.4%. Excluding the effect of fuel, same-store sales rose 3.9%. The stock, which like Verizon Communications is one of the 30 that comprise the Dow industrials, rose $1.94, or 3.4%, to $59.62.Advancing issues outnumbered decliners by about 3 to 1 on the New York Stock Exchange, where volume came to 484.2 million shares.The Russell 2000 index of smaller companies rose 10.98, or 1.48%, to 754.69.Overseas, Japan’s Nikkei stock average finished down 0.65%. Britain’s FTSE 100 rose 0.42%, Germany’s DAX index declined 0.34%, and France’s CAC-40 fell 0.16%.

Retail and Employment Data Spark Market Gains

Retail and Employment Data Spark Market Gains

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