Holiday sales help push up stock market
The stock market finally has something to be thankful for, as stocks surged from the opening bell thanks to excitement over revved-up holiday shopping and the latest plan to contain Europe’s debt crisis.
After sagging nearly 1,000 points this month, the Dow Jones industrial average rose 291.23 points, or 2.6%, to 11,523.01. The Standard & Poor’s 500 index jumped 33.88 points, or 2.9%, to 1,192.55. It was the best day for each index in a month.
Global markets got a boost from news that Germany and France are drawing up plans that would commit European Union members to greater fiscal unity. That raised hope that European leaders may address an underlying cause of the continent’s financial problems: the absence of a workable mechanism that would force individual countries in the 17-nation Eurozone to exercise strict budgetary discipline.
Share prices surged through Europe, with Germany’s benchmark stock index jumping 4.6% and France’s leaping 5.5%.
Investors also were buoyed by reports pointing to strong consumer spending over the closely watched Black Friday shopping weekend.
Shoppers shelled out a total $52.4 billion from Thanksgiving Day through Sunday, a 16.4% surge from $45 billion last year, according to the National Retail Federation. Each shopper on average spent $398.62, a 9.1% bump from last year, and more were willing to buy gifts for themselves on top of presents for family and friends.
Still, it remains to be seen whether the market rebound lasts longer than a day or two.
“Short covering” may have helped to stoke the rally, as traders who had borrowed stock and sold it, betting on further declines, closed out their bets once the market turned up.
Stocks have repeatedly surged in recent months on reports of progress in Europe, only to falter again when investors studied the details and concluded that there was no immediate solution to the debt overhang in many countries.
And some skeptics worry that the encouraging start to holiday shopping could peter out if it's shown that some consumers simply front-loaded their shopping, thus sapping sales from later in the season.
-- Walter Hamilton, Nathaniel Popper, Shan Li and Tom Petruno
Photo: The American flag flying at the New York Stock Exchange. Credit: Spencer Platt / Getty Images