Retail sales send stocks up again
The Dow Jones industrial average rose more than 100 points in early trading after the Commerce Department reported that retail sales grew 0.5% in July, the biggest bump in four months. The data suggested that consumer spending, one of the main drivers of the economy, may not be slowing down as much as feared.
The news gave support to economists who have said that fears of a new recession may be overblown.
"The rise in retail sales values in July supports our view that there will be at least some rebound in economic growth in the third quarter and that another recession will, in all likelihood, be avoided," Paul Dales, with Capital Economics, wrote to clients Friday morning.
The early gains were tempered later in the morning when the University of Michigan announced that its index of consumer confidence fell more than expected, from 64.7 in July to 54.9 in August.
The Dow was recently trading up 104.44 points, or 0.9%, to 11,247,75.
Markets in Europe are trading up even more sharply, encouraged partly by a ban on short-selling that was imposed last night in several European countries. Leading indexes were recently up 2.7% in France and 2.3% in England.
The market rally built on Thursday's 424-point surge in the Dow, and helped chip away at some of the losses the markets have sustained over the last two weeks.
Photo: Trader on the floor of the New York Stock Exchange Friday morning. Credit: Reuters