Strong retail sales and a healthy reading on the housing market helped US stocks start December with a two-day winning streak.
The Dow Jones industrial average rose 106 points. Combined with a 249-point gain Wednesday, the Dow has had its best two-day run since July 7-8.
Major retailers reported sales in November that were stronger than analysts expected. Increased spending during the holiday season would be a strong signal that consumers are feeling more confident.
“Any sign that the consumer is doing better means that the economy will be doing better,” said Drew Matus, a senior economist at UBS.
Costco Wholesale Corp, Target Corp and Limited Brands Inc all beat Wall Street sales forecasts. Teen retailer Abercrombie&Fitch Co jumped 11% after reporting that its sales soared 32%.
“The consumer is strong and month after month retailing has been very strong,” said Ryan Detrick, the chief technical strategist at Schaeffer’s Investment Research. “If you take a step back it’s clear that the US economy continues to slowly expand.”
The National Association of Realtors said the number of people who signed contracts to buy homes jumped 10.4% in October. Economists expected a slight decline. Home builder KB Home rose by 4.5%.
The Dow rose 106.63, or 1%, to close at 11,362.41 The Dow jumped 2.3% on Wednesday, its biggest gain since September 1, after a report showed that private employers were adding jobs. The broader Standard&Poor’s 500 index rose 15.46, or 1.3%, to 1,221.53. The Nasdaq composite index rose 29.92, or 1.2%, to 2,579.35.
Rising shares outpaced falling ones more than two to one on the New York Stock Exchange. Volume was 1.1 billion shares.
The rise in both retail sales and existing home sales overshadowed an unexpected rise in new claims for unemployment benefits. The Labour Department said first-time unemployment claims rose to 436,000 last week.