WASHINGTON (AP) — U.S. stocks are opening higher after a strong report on retail sales soothed economic jitters that have driven record-setting gains and losses this week.
The government says that consumers spent more on autos, furnitre and gasoline in July, pushing up retail sales by the largest amount in four months.
The news offered some direction for traders dizzy from see-saw trading caused by concerns about the economic growth and a spreading financial crisis in Europe.
If shares close higher, it will be the first time in more than a month that the market has risen two days in a row.
In early trading, the Dow is up 113 points, or 1 percent, at 11,256. The S&P 500 is up 2, or 1.1 percent, at 1,185. The Nasdaq is up 16, or 0.6, at 2,507.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
WASHINGTON (AP) — A strong report on retail sales in July sent U.S. stock index futures higher after a week of record-setting gains and losses on Wall Street.
The government said that consumers spent more on autos, furniture and gasoline in July, pushing up retail sales by the largest amount in four months. The gain signals that Americans are a little more confident, and helps to dispel fears that the economy could tip back into recession.
Retail sales rose 0.5 percent last month, the best showing since a 0.8 percent advance in March, the Commerce Department said. It revised sales higher in the previous two months.
The news offered some direction for traders dizzy after the market’s gyrations this week. Shares have been swinging by hundreds of points each day as traders react with hair triggers to news about the economy, Federal Reserve policy and a financial crisis in Europe that threatens to spill over into U.S. banks.
High-speed trading by computers has contributed to the volatility, as shares hit high and low levels at which machines are programmed to buy or sell large numbers of shares.
About a half-hour before the market opens, the Standard & Poor’s 500 index rose 9 points, or 0.8 percent, to 1,177. Dow Jones industrial average futures rose 76, or 0.7, to 11,160. Nasdaq 100 futures rose 10, or 0.4, to 2,168.
Futures do not necessarily predict what shares will do when the market opens, however.
Traders are also awaiting a report at 10 a.m. on how businesses adjusted their stockpiles in June. Analysts expect that businesses expanded their inventories for the 18th straight month, but at a slower pace than in recent months, according to FactSet data.
Growing inventories typically are a sign of confidence. But nervous consumers have held back recently, causing consumer spending to decrease in June for the first time since 2009. If inventories pile up for too long, companies will order fewer goods, potentially hurting manufacturers.
Markets in Europe advanced on Friday and bank stocks recovered some of this week’s losses. Regulators of major European exchanges banned the short-selling of financial company shares, protecting them from downward pressure by speculators. Asian markets closed mixed.
France’s benchmark index, the CAC-40, rose 2.1 percent despite news that the nation’s economy hit the brakes in the second quarter as exporters’ wares piled up and consumers held onto their money.
Concerns about the French economy stoked fears about the crisis in the eurozone, where France has the second-largest economy after Germany’s. As their heavily indebted neighbors struggle to stay afloat financially, the region’s economic powers must shoulder most of the costs of rescuing Greece, Portugal and Ireland from defaulting on their debts. A default would increase borrowing costs and hurt the regional currency.
If France’s economy falters or if it loses its AAA credit rating, the nations might have trouble raising the money that they need to pay for future bailouts. Worries about debt issued by Italy and Spain, and the stability of banks there, have prompted the European Central Bank to buy their sovereign bonds to lower their borrowing costs.
Italy and Spain have Europe’s third- and fourth-largest economies. The current bailout programs probably would be too small to rescue them from a potential default.
Most other major European markets rose by more than 2 percent, including London’s FTSE index, Germany’s DAX, Italy’s FTSE MIB and Spain’s IBEX.
The gains followed a winning day on Wall Street that would have ranked as a stunning rally during any normal trading week.
The Dow Jones industrial average soared 423 points on Thursday. It had already fallen 634 points Monday, risen 429 Tuesday and fallen 519 Wednesday. Never before has the Dow had four 400-point swings in a row.
The S&P 500 finished up 4.6 percent and the Nasdaq composite index 4.7 percent.
The Standard & Poor’s 500 index has risen or fallen at least 4 percent each day. That has not happened on four consecutive days since November 2008, the depths of the crisis.
American investors were encouraged before the market opened Thursday by news that new claims for unemployment benefits dropped below 400,000 for the first time in more than four months, signaling fewer layoffs and a job market that is improving slowly.
Markets also received a boost by Cisco Systems’ reporting better-than-expected profit and offering a positive outlook for the current quarter. Cisco shares rose
The stock market began its long skid downward three weeks ago, on July 22.