Stocks end up slightly as rates fall
Stocks rose a bit Thursday, building on the previous session's big rally -- its best in a month -- as investors cheered solid May retail sales.
How major indexes fared:
■ Dow: Up 0.2%
■ S&P 500: Up 0.2%
■ Nasdaq: Up 0.1%
The 10-year Treasury yield slid back from recent highs, down to 2.38% Meanwhile, drama over Greece debt talks, a potential market mover in coming days, drags on.
Wall Street had been looking for retail sales -- and consumer spending -- to show signs of rebound, as a lack of spending was viewed as the missing link in the thesis that the economic rebound and spring thaw was underway. Well, investors got the good news they hoped for, cementing the view that the first-quarter slowdown was indeed due largely to a harsh winter.
Retail sales jumped 1.2% in May, matching expectations. But the flat reading in April was revised up to a 0.2% increase. March retail sales also were revised higher.
The latest sign of an economy on the rebound, coupled with initial news reports that negotiations between debt-strapped Greece and its eurozone creditors were entering a stage of "high intensity," provided relief to investors.
"Welcome back U.S. consumer," is the way Barclays economist Michael Gapen summed up today's good news on consumer spending.
Investors are also digesting comments from the World Bank, urging the Federal Reserve to hold off on hiking short-term interest rates until next year. The Fed has said they are leaning on raising rates later this year amid signs the economy, inflation and job market are heading in the right direction.
The news on the Greece front tuned sour later Thursday, as the IMF announced there was no progress in talks over loan repayments and issuance of further bailout aid. The IMF says it's pulled its team out of the talks taking place in Brussels. For now, anyway.
But investors in the U.S. as well as Europe are looking past this apparent hitch.
"There are major differences between us in most key areas," said Gerry Rice, spokesman for the IMF, the International Monetary Fund.
German Chancellor Angela Merkel had said just hours before that Greece has committed to work with its creditors in the coming days to resolve outstanding issues holding up its access to vital bailout loans.
France's CAC 40 ended up 0.7% and Germany's DAX is 0.6% higher, while Britain's FTSE gained 0.2%.
The Athens Stock Exchange General Index went into blastoff mode -- posting an 8.2% gain by trading's end -- before news of the breakdown in talks came.
In Asia, Japan's Nikkei 225 index ended 1.7% higher and Hong Kong's Hang Seng index gained 0.8%.
Stocks surged and bond yields hit nearly nine-month highs Wednesday as signs of progress in the Greek debt talks and U.S. wage growth encouraged investors.
Contributing: Ed Brackett.
