Upbeat Retail Sales Data Leads To Early Rally On Wall Street - U.S. Commentary

(RTTNews) - Stocks have moved sharply higher in early trading on Thursday after ending the previous session firmly in negative territory. The major averages have all shown upward moves, nearly offsetting yesterday's steep losses.

In recent trading, the major averages have seen some further upside, reaching new highs for the young session. The Dow is up 215.70 points or 1.2 percent at 17,748.85, the Nasdaq is up 70.50 points or 1.5 percent at 4,754.53 and the S&P 500 is up 27.62 points or 1.4 percent at 2,053.76.

The rebound on Wall Street comes following the release of a Commerce Department report showing a bigger than expected increase in U.S. retail sales in the month of November.

The report said retail sales climbed by 0.7 percent in November following an upwardly revised 0.5 percent increase in October.

Economists had expected sales to rise by 0.4 percent compared to the 0.3 percent growth originally reported for the previous month.

The better than expected data has generated optimism about the holiday shopping season, which is the most important time of the year for retailers.

Peter Boockvar, managing director at the Lindsey Group, said, "While it's easy to say that lower gasoline prices gave a boost to sales, we of course don't know how much of the savings at the pump was spent or saved."

"We'll assume some was spent but also the better labor market was likely a factor in the modest upside too," he added.

Retail stocks are turning in a strong performance following the release of the report, with the Dow Jones Retail Index surging up by 2.1 percent. Urban Outfitters (URBN) is posting a standout gain after the apparel retailer provided upbeat sales guidance.

Significant strength is also visible among networking stocks, as reflected by the 2.5 percent gain being posted by the NYSE Arca Networking Index. Ciena (CIEN) is leading the sector higher despite reporting an unexpected fourth quarter loss.

Oil service, natural gas, internet, and computer hardware stocks are also seeing early strength, moving higher along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both slumped by 0.9 percent, while China's Shanghai Composite Index fell by 0.5 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.'s FTSE 100 Index is down by 0.5 percent, the French CAC 40 Index is up by 0.1 percent and the German DAX Index is up by 1 percent.

In the bond market, treasuries are moving moderately lower on the heels of the upbeat retail sales data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.5 basis points at 2.194 percent.