Three straight days of rally at Wall Street

Encouraging retail sales data take stocks higher for third consecutive day

Stocks at Wall Street witnessed huge gains on Thursday 12 March, 2009. For stocks at Wall Street, it was the best three days since November, 2008. Couple of better than expected economic reports, mainly the retail sales data acted as the main catalyst behind today's rally. The fact a congressional subcommittee is meeting to examine mark-to-market accounting rules also helped support a positive bias. All the ten sectors surged led by huge gains in the financial sector.

The Dow Jones Industrial Average ended higher 239 points at 7,170, the Nasdaq closed higher by 55 points at 1,426 and the S&P 500 closed higher by 30 points at 750. Dow had started the day 36 points down earlier during the day

All but one of thirty Dow stocks ended in the green. Microsoft was the sole loser. American Express, Bank of America and JP Morgan Chase were the main Dow winners. GE stock also rallied today despite the company getting a downgrade.

The financial sector had some good news once again today after Bank of America announced that it has witnessed profits for two months in a row this year. Other than that, the company also announced that it is perhaps done with taking further government aid.

Among major economic news at Wall Street today, the Commerce Department reported today that U.S. retail sales began the year 2009 much stronger than expected. It came after a disastrous holiday shopping season in 2008. Retail sales dropped 0.1% on a seasonally adjusted basis in February, better than the 0.4% decline expected. More importantly, January's sales gain was revised much higher, to a 1.8% growth rate from the 1% increase estimated a month ago.

Retail sales are down 8.6% in the past year and had declined for a record six straight months before January's surprising gain. Sales had plunged 3.1% in December.

The report detailed that auto sales sank 4.3% in February, after automakers reported their worst month for sales in a generation. Excluding autos, retail sales rose 0.7% in February after an upwardly revised 1.6% gain in January. Sales excluding both gasoline and autos rose 0.5% in February after a 1.4% gain in January.

Other than the above report, the Labor Department reported today that the number of workers filing initial claims for state unemployment benefits rose 9,000 to a seasonally adjusted 654,000 last week. The average of new claims over the past four weeks also gained, rising 6,750 to stand at 650,000, the highest level since October 1982.

Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs.

In a separate report, February business inventories declined 1.1%, which is essentially in-line with the consensus estimate.

Crude prices shot up on Thursday, 12 March, 2009. Prices rose today as traders mulled over OPEC's forthcoming meeting at Vienna this coming weekend where the cartel is expected to decide another production cut to restore crude prices. Crude-oil futures for light sweet crude for April delivery closed at $47.03/barrel (higher by $4.7 or 11.1%) on the New York Mercantile Exchange.

Tomorrow the main important economic reports expected are February export and import prices and the January trade balance. Around 10:00ET, the University of Michigan will release its preliminary consumer sentiment survey for March.