Strong retail sales lifts Nasdaq, Dow to new highs

NEW YORK (AP) ? Strong February retail sales results helped drive U.S. stocks to new highs Tuesday afternoon.

The Nasdaq composite pushed back above 3,000 for the first time in two weeks. The Dow Jones industrial average surged back above 13,000.

Major indexes added to their gains after the Federal Reserve offered a more positive view of the economy.

The Fed noted that the unemployment rate has declined and should keep falling. It also said strains in the global financial markets have eased, though they could still pose a threat.

The Dow Jones industrial average gained 122 points to 13,083 just before 2:30 p.m. Eastern time. That’s a gain of 1 percent. Alcoa Inc. is the Dow’s leading stock, up 3.7 percent. The Dow is headed for its first five-day winning streak since September.

The Commerce Department said retail sales rose 1.1 percent last month, the biggest gain since September. Some of the gain reflected higher gas prices, but consumers also bought more cars, clothes and appliances. Department stores had their biggest gains in more than a year.

The government also revised its estimates higher for December and January.

A reading of confidence among small business owners also rose in February for the sixth month in a row. The National Federation of Independent Business optimism index reached its highest level in a year, helped by an increase in expected sales.

The Nasdaq composite index gained 33 points, or 1.1 percent, to 3,016. The Nasdaq last broke through the 3,000 mark Feb. 29 but ended the day lower. The last time the index closed above that level was in December 2000.

The Standard & Poor’s 500 index rose 13 points, or 0.9 percent, to 1,383.

The S&P 500, a broad measure of the stock market, has already gained 10 percent this year, more than its average for a full calendar year. After such a strong start, can stocks go higher?

“Yes,” said Brian Gendreau, market strategist at Cetera Financial. “Valuations are still very cheap.”

Investors are paying 13 times the past year’s earnings for the S&P 500 index. The long-term average is closer to 15. “Of course,” Gendreau said, “stocks can stay cheap for a long time.”

Among companies making big moves:

? Great Wolf Resorts jumped 13 percent to $5.13. Apollo Global Management said it has agreed to buy the indoor water park operator for $5 a share.

? Urban Outfitters plunged 5.6 percent, the worst drop in the S&P 500 index. The retailer reported earnings that fell below what analysts were expecting after it had to mark down prices on women’s clothing at its Anthropologie and Urban Outfitters stores.

? Carmike Cinemas soared 17 percent. The Georgia-based movie theater chain reported earnings and sales that far outpaced what Wall Street analysts had expected.