Wall Street Rallies on Upbeat Retail, Economic Data


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A round of encouraging data from retailers, and on the labor market, helped Wall Street overcome jitters over Europe's deepening debt debacle, and setoff a mid-day rally.

Today's Markets

As of 3:20 p.m. ET, the Dow Jones Industrial Average rose 93.3 points, or 0.85%, to 11,034, the S&P 500 gained 10.6 points, or 0.98%, to 1,155 and the Nasdaq Composite climbed 25.9 points, or 1.1%, to 2,486.

Wall Street has closely followed developments on the euro zone's deepening sovereign debt crisis, which in recent weeks has put pressure on many European banks.

The European Central Bank's held interest rates steady at 1.5%, as was widely expected by economists.  However, it came as somewhat of a disappointment after some analysts suggested the central bank would take stronger-than-expected measures to fight strengthening economic headwinds.

Separately, the Bank of England held rates steady at 0.5%, a historically-low level, as was widely expected. The BoE also unveiled a 75 billion pound stimulus program aimed at blocking the country from the region's sovereign debt crisis.

The European Commission said early Thursday it would make proposals for recapitalizing banks there.  Analysts expect officials may implement a system wherein they trade lower quality assets tied to sovereign debt for higher-quality assets.

German Chancellor Angela Merkel also noted later in the day that banks should first attempt to utilize national channels for liquidity before any considerations would be made to tap the euro zone rescue fund, called the European Financial Stability Facility.

The euro changed course and gained 0.9%, while the greenback fell 0.32% against a basket of world currencies.

The Labor Department's weekly jobless claims report showed claims rose to 401,000 last week from 395,000 the week prior. Economists expected a larger rise to 410,000 for the week. This report comes ahead of the highly-awaited monthly employment report, which, economists anticipate, will show the unemployment rate sticking above 9%.  A batch of relatively encouraging data released recently, however, has raised hopes that the jobs report could beat expectations.

Retail sales climbed 5.1% last month, according to a survey by Thomson Reuters, topping expectations of a 4.6% increase.  Retailers like Target (NYSE:TGT), which reported same-store-sales increases of 5.3% compared with estimates of 3.9%, successfully utilized promotions to sell excess back-to-school inventory, as companies ramp up for the key holiday buying season.  Macy's (NYSE:M) posted sales gains of 4.9%, also topping estimates of 4.4%.

Energy markets soared in the previous session, and zipped higher once again on Thursday.  Light, sweet crude soared $2.91, or 3.7%, to $82.59 a barrel.  Wholesale RBOB gasoline surged 12 cents, or 4.6%, to $2.69 a gallon.

Gold, meanwhile, jumped $11.60, or 0.71%, to $1,653 a troy ounce.

Treasury yields have been clawing their way back from historic lows as investors have come back into equity and commodities markets.  The benchmark 10-year note recently yielded 1.908% from 1.895%.

Corporate News

Apple (NASDAQ:AAPL) co-founder Steve Jobs died at the age of 56.  Jobs was widely considered to be the visionary behind the company's revolutionary products, and its transformation into the world's most valuable technology company.

Foreign Markets

The Euro Stoxx 50 jumped 3.2% to 2,249, the English FTSE 100 soared 3.7% to 5,291 and the German DAX climbed 3.2% to 5,545.

In Asia, the Japanese Nikkei 225 rose 1.7% to 8,522 and the Chinese Hang Seng leaped 5.7% to 17,172.