Stocks on Wall Street surged on 14th June, 2011 after the US government released new statistics on the economy, including a retail sales report that traders viewed as positive.
The stronger market that represented the biggest gain of Dow Jones Industrial Average this month was described by analysts as a relief rally.
Investors were pleased with the retail sales report and Best Buy’s fiscal first-quarter results also helped buoy the markets, said David Krein, a senior director for Dow Jones Indexes.
The company reported earnings of $136 million, or $0.35 a share, compared with $155 million, or $0.36 a share, for the same period in 2010. These results beat forecasts and shares of Best Buy rose more than 4.5 percent to $30.13.
An indicator of consumer purchasing from the Commerce Department showed that overall retail sales in May declined by 0.2 percent, less than the 0.5 percent fall that had been forecast by analysts surveyed by Bloomberg.
“With higher gas prices eating into the income available for discretionary spending, the consumer faces stiff headwinds,” said Joshua Shapiro, the chief United States economist for MFR.
The Producer Price Index, which reflects commodity prices for manufacturers, rose 0.2 percent in May, according to seasonally adjusted figures provided Tuesday by the Bureau of Labor Statistics.
“It is a pretty powerful relief rally,” said Keith B. Hembre, the chief economist and chief investment strategist at First American Funds.
The Dow Jones industrial average closed up 123.14 points, or 1.03 percent, to 12,076.11. The Standard & Poor’s 500-stock index rose 16.04 points, or 1.26 percent, to 1,287.87. The Nasdaq composite index average climbed 39.03 points, or 1.48 percent, to 2,678.72.
On Tuesday, the chairman of the Federal Reserve, Ben S. Bernanke, said, “Although historical experience and economic theory do not show the exact threshold at which the perceived risks associated with the U. S. public debt would increase markedly, we can be sure that, without corrective action, our fiscal trajectory is moving us ever closer to that point.”