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12-Mar2019

US markets end higher on upbeat retail sales data

Snapping their five-day losing streak, the US markets ended higher on Monday following the release of a report from the Commerce Department showing an unexpected uptick in US retail sales in January. The Commerce Department said retail sales rose by 0.2% in January after tumbling by a revised 1.6% in December. Street had expected retail sales to come in unchanged compared to the 1.2% slump originally reported for the previous month. The rebound in retail sales came despite a substantial decrease in sales by motor vehicle and parts dealers, which nosedived by 2.4% in December after rising by 0.3% in December. Excluding the steep drop in auto sales, retail sales climbed by 0.9% in January after plummeting by a revised 2.1% in December. Ex-auto sales had been expected to increase by 0.3% compared to the 1.8% plunge originally reported for the previous month. The stronger than expected ex-auto sales growth reflected sharp increases in sales by sporting goods, hobby, musical instrument, and book stores and building materials and supplies dealers.

Meanwhile, business inventories in the US increased in line with Street estimates in the month of December, according to a report released by the Commerce Department. The report said business inventories climbed by 0.6% in December, while revised data showed inventories were unchanged in November. Street had expected inventories to increase by 0.6% compared to the 0.1% uptick originally reported for the previous month. Wholesale and retail inventories jumped by 1.1% and 0.9%, respectively, while manufacturing inventories were unchanged. Besides, sentiment also got boost as technology shares rallied, offsetting some of the gloom from Boeing Company's woes after the second deadly crash in about six months involving the company's 737 Max 8 aircraft. Apple shares rose 3.47% after Bank of America Merrill Lynch upgraded the stock to buy from neutral. Bank of America noted the company's recent pullback presents opportunity. The bank also raised its 12-month price target to $210 per share from $180.

Dow Jones Industrial Average surged 200.64 points or 0.79 percent to 25650.88, S&P 500 rose 40.23 points or 1.47 percent to 2783.30 and Nasdaq was up by 149.92 points or 2.02 percent to 7558.06.


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