U.S. stocks rose Monday after Thanksgiving retail sales climbed to a record and eurozone leaders were said to boost efforts to end the debt crisis.
The Dow Jones industrial average closed up 291.23, or 2.59%, at 11,523.01; the S&P 500 rose 33.88, or 2.92%, closing at 1,192.55; and the Nasdaq composite was up 85.83, or 3.52%, to close at 2,527.34. All numbers are preliminary.
“The market is reflecting that the U.S. retail sales were just colossal and some movement forward in Europe,” Tom Mangan, senior vice president and portfolio manager at James Investment Research, said in a telephone interview. “There’s a sense of urgency developing among European leaders as well as a recognition that the stakes are extremely high now. The volatility is still with us to a major extent, we’re not out of the woods.”
U.S. retail sales during the Thanksgiving weekend increased 16% to $52.4 billion, the National Retail Federation said, citing a survey conducted by BIGresearch. The average shopper spent $398.62, up from $365.34 a year earlier. Consumer spending, which accounts for about 70% of the economy, grew at a 2.3% annual rate in the third quarter, the fastest pace in 2011, the Commerce Department said Nov. 22.
Stocks maintained gains after a Commerce Department report Monday showed new home sales for October increased 1.3% to a 307,000 annual pace, below the 315,000 estimate of 70 economists surveyed by Bloomberg News.
In Europe, German newspaper Welt am Sonntag reported German Chancellor Angela Merkel and French President Nicolas Sarkozy are discussing an agreement under which member states will commit to tighter budget discipline without waiting for treaty changes. The newspaper did not say where it got the information.
German Finance Minister Wolfgang Schaeuble called for fast-track treaty changes to tighten budget discipline among member states of the eurozone. He spoke in an interview with ARD television in Berlin on Sunday.
The European Financial Stability Facility may insure the bonds of debt-stricken countries with guarantees of 20% to 30% of each issue, depending on market circumstances, according to EFSF guidelines that finance ministers will discuss this week. Eurozone finance ministers meet in Brussels on Tuesday as governments bid to regain the confidence of financial markets.
“It would be a relief for money managers if we can just move Europe from a negative to a neutral impact on the market,” Dan Veru, chief investment officer at Palisade Capital Management, which manages $3.4 billion, said in a telephone interview. “There’s an underpinning of growth in the U.S. and it’s picking up steam.”