GM's finance arm gets a break; Crude-oil rises after four-session drop
U.S. stocks posted some gains in light trade Friday, led by gains in energy shares as crude-oil prices advanced, while retailers were in focus as post-Christmas sales kicked off in earnest.
Amazon.com Inc. said Friday that the 2008 holiday season had "finished as its best ever," in spite of grim results across much of the overall retail sector. See full story on Amazon holiday results.
An early survey of the retail sector pointed to a dismal Christmas shopping season.
"We're not getting good numbers on the retail side, but when the market shrugs off bad news, that's good news," said Paul Mendelsohn, chief investment strategist at Windham Financial Services.
"A lot of this bad news is already built into this market, and people are trying to find a light at the end of the tunnel," he said.
The Dow Jones Industrial Average rose 47 points to 8,515, with 17 of its 30 components gaining ground, led by the likes of Alcoa , Exxon Mobil .
Shares of General Motors Corp. led gainers among blue chips, rising 13%. The Federal Reserve approved the request by its finance arm, GMAC, to become a bank holding company and become eligible for financing under the U.S. Treasury Department's $700 billion Troubled Asset Relief Program.
The S&P 500 rose 7.4 points to 872, while the Nasdaq Composite advanced 5.3 points to 1,530.
For the week, the Dow dipped 0.7%, the S&P lost 1.6% and the Nasdaq fell 2.2%.
No holiday cheer for retail
Total retail sales dropped 5.5% to 8% for November and December, according to MasterCard Inc.'s SpendingPulse. The 40% drop in the price of gasoline compared with December 2007 accounts for almost half of the decline.
Excluding gasoline, total sales were down 2% to 4% this holiday season from the same period in 2007.
"A difficult economic environment combined with unfavorable weather during the last week of shopping made 2008 one of the most challenging holiday shopping seasons in decades," the survey said. See full story on initial holiday shopping results.
The energy sector led the gains on the S&P, rising 2%, as crude-oil prices recovered some ground after sliding 33% this month. See Futures Movers.
With the end of the year approaching, a fresh wave of selling over the past few weeks has afflicted some of the hardest-hit sectors of the market this year, such as financials and energy, as investors ditch losing positions to take advantage of the losses for tax purposes, according to Mendelsohn.
But some buying is also seen as investors try to gauge which sectors might have been beaten down too hard.
"To a large degree, [trading] action is driven by window dressing and setting up positions for next year," Mendelsohn said.
Among other gaining sectors Friday, were telecoms, up 2%, and materials up 1.8%.
"There has also been a lot of tax-loss selling over the past couple of weeks," he said. "As we get closer to the end of the year, people done with their tax-loss selling may not want to remain short for too long in some sectors such as energy."
So far in 2008, the Dow industrials have lost 35.8%; the S&P 500, weighed on by financials, is down 40.6%; and the Nasdaq Composite is down 42.3%.
Trading volumes were very light Friday, with 516 million shares changing hands on the New York Stock Exchange and 218 million on the Nasdaq Stock Market. Advancing issues topped decliners 3 to 1 on the NYSE, and 15 to 11 on the Nasdaq.
The U.S. dollar traded little changed, with poor retail sales doing little to further push the greenback's mid-December stabilization. The dollar index , which measures the currency versus six major counterparts stood at 80.89, virtually unchanged on the day. See Currencies.
Treasurys were slightly higher Friday, with 10-year-note yields falling on evidence of poor retail sales, serving as a focus amid thin post-holiday trading. Ten-year yields fell 2 basis points to 2.18%. See more on Treasurys in Bond Report.
Asian markets finished the session mixed, with gains in Tokyo but losses for China and South Korea.
Several markets in Asia were closed for a holiday, while U.K. and Europe markets were also closed Friday. Japan reported a record slump in industrial production with its steepest output decline since the government began collecting data in 1953. See full story on Japanese industrial data.
On Wednesday, U.S. stocks had finished higher after a shortened pre-holiday trading session, gaining ground as data on consumer spending and durable-goods orders for November were better than expected. The Dow notched a 0.6% advance, with 22 of its 30 components trading higher. Markets were closed Thursday.
