By  on January 30, 2006

NEW YORK — Despite weak economic data last week, the market perked up on Friday as investors speculated that foreign economies would continue to expand, creating demand for U.S. goods and services.

As a result, the S&P 500 closed the week up 1.8 percent to 1,283.72. Retail and apparel stocks were also buoyed by the enthusiasm. The WWD Composite Stock Index jumped 1.7 percent for the week.

On Friday morning, the Commerce Department said the gross domestic product rose 1.1 percent in the fourth quarter of 2005, which is significantly slower than the third quarter's 4.1 percent gain and the slowest pace in three years.

But several economists said the slowed pace was just temporary. The global economy is growing steadily, and they expect U.S.-based companies to benefit from it.

Wall Street was also giddy that the Federal Reserve might raise interest rates just one more time before it puts a hold on increases for at least the rest of the year.

This week, same-store sales are on the agenda with most retailers reporting results on Thursday.

"January is traditionally a month for fall-winter clearance and spring rollouts," said Citigroup analyst Deborah Weinswig in a research note Friday. "This year, persistent warm weather (warmest January in the last 112 years) dampened the retailers' ability to clear goods to make way for new receipts despite promotions. Retailers who transitioned early benefited from full-priced selling, while inventory levels may be above plan for others."

The analyst went on to say that with gift cards increasing in importance, "we believe many broadlines retailers benefited from sales shifting into January."

The Citigroup Broadlines Index is looking at a same-store sales increase of 4.1 percent, which compares with a 3.1 percent gain in December, and a 3.1 percent gain for the same month last year.

Weinswig said Target Corp. and Nordstrom Inc. face the toughest, year-over-year sales comparisons in the mass and department store channels.

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