United States Stock Markets Gain on Retail Sales

United States stock markets ended on Monday close to session highs. After last week’s drastic fall, positive retail sales helped to boost share prices. Top performers for the day included Merck and Citigroup. The Dow Jones Industrial Average gained 95.38 points to end at 13,424.23 or 0.72 percent higher. Individually, Merck rose 2.13 percent to reach 46.59. Bank of America shares gained 3.51 percent to reach 9.44.
At the same time, Standard & Poor’s 500 index rose 11.54 points or 0.81 percent. It ended the day at 1,440.13 while the Nasdaq gained 20.07 points. The Nasdaq finished out the trading session 0.66 percent higher at 3,064. One of the best gauges of negative sentiment in the market, the CBOE Volatility Index dropped by 15 as investors gained confidence.
Stocks Suffer Large Drop
Last week, the stock market logged its worse weekly fall in more than four months. Each of the United States main stock markets dropped over two percent. The Standard & Poor’s 500 Index and the Dow Jones Industrial Average managed to hold above their 50-day moving average. This key level is considered their technical support levels. Most recent data indicates that the United States economy is headed toward a slow recovery. Although third-quarter profit reports were lower than expected, the world’s largest economy managed to add jobs during the month of December. The United States currently has a 7.8 percent unemployment rate which is its lowest since 2009.
According to the United States Commerce Department, retail sales gained in the month of September. In August, the Commerce Department also reported a growth in business inventories. Manufacturing in New York States contracted. According to the New York Federal Reserve Bank, this is the third-consecutive month that manufacturing has fallen in New York.
Europe Gains
On Monday, German Finance Minister Wolfgang Schauble announced that Greece would not be defaulting on its debt. Long considered one of the weakest members of the European Union, Greece has spent the last few years battling an ongoing debt crisis. Analysts have worried over the possibility that the nation would exit the euro. German Finance Minister Wolfgang Schauble warned of severe consequences for the Eurozone if Greece chose to exit the euro.
After this announcement, European stock markets gained. Although investor fears are temporarily allayed over Greece, there is still a high level of concern about Spain. The debt-ridden nation has yet to request a bailout formally. For Spain to end its debt crisis, it must seek assistance from the Eurozone. Underlying data in the area points to a severe recession.
In China, consumer price inflation grew in the month of December. At the same time, producer prices fell from this time last year. Other reports exiting China showed that export growth has grown to twice the rate that analysts had forecasted for December.
Individual Performers
Several major banks in the United States are expected to report their earnings for the third-quarter later on this week. In particular, investors are waiting for reports from Goldman Sachs and Bank of America. Bank of America shares gained 3.51 percent or 0.32 points during Monday’s trading session. Shares in the bank are trading at $9.44. Goldman Sachs shares also rose during the day. They finished Monday’s session 4.20 dollars or 3.58 percent higher at $124.50. Positive reports from Citigroup boosted shares by $.191 or 5.5 percent. Citigroup is presently trading at $36.66.
Reports came out about ongoing talks between Amazon and Texas Instruments. Amazon is looking for a supplier of semiconductors for its Kindle tablet. After the news came out, shares of Texas Instruments gained 0.94 dollars or 3.45 percent to reach $28.22. Amazon shares also gained during the trading session by 0.75 percent or $1.82. Shares in the company ended the day Monday at $244.18.
The pharmaceutical company, Eli Lilly, reported that it was in the last stages of a new cancer treatment. Designed to aid stomach cancer patients and improve survival rates, the drug is in the last stages of a clinical study. In response, Leerink Swann changed the company’s rating from “market perform” to “outperform. Shares in Eli Lilly rose 4.12 percent, or $2.08, to reach $52.53.
Shares in Abbot Labs also gained $2.77 or four percent following positive results from their clinical trials on hepatitis C medicines. Abbott Labs finished out the trading session at $72.05.
Japan Gaining Stake in Sprint
This weekend, Japan’s Softbank announced that it was concluding a $20 billion deal with Sprint. For this purchase price, it would gain a 70 percent stake in the company. Despite this announcement, shares in Sprint remained roughly unchanged at $5.69. Sprint owns the majority of Clearwire, which saw a gain of $15.95 percent. Clearwire finished the day $0.37 higher at $2.69. Meanwhile, Verizon dropped by $0.12 to $44.50 while AT&T fell $.0.42 to $35.21.
Upcoming Week
On Tuesday, the Treasury is releasing a report on industrial production, international capital, CPO and industrial production. New Corps will be holding a shareholders meeting while the second presidential debate will be held on Tuesday night. Key banks are expected to release their earnings reports for the third-quarter. Among the most watched reports, investors can expect to see announcements from Goldman Sachs and PNC Financial. Coca-Cola, IBM and Intel are also intending to release their quarterly earnings reports.
Bank of America, Northern Trust, American Express and the Bank of New York Mellon are releasing their earnings reports on Wednesday. Investors should watch for third-quarter reports from Blackrock, EBay and Northern Trust. On Thursday, the Philadelphia Federal Reserve Bank will release a survey of leading indicators. The United States will also report jobless claims. Earnings reports are expected from Verizon, Morgan Stanley, Capital One, Nokia and Huntington Bancshares on Thursday. On Friday, existing home sales will be reports for the United States while Honeywell and McDonald’s are intending to report their third- quarter profit data.  As long as data from the United States remains positive, the stock market should continue to rise over the next week. Analysts are worried, however, about the possibility of lowered third-quarter profits and growth forecasts. 
About the Author
Marcus Holland is editor of the websites financialtrading.com and options-trading.com. He holds an Honors degree in Business and Finance and regularly contributes to various financial websites.

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