The stock market rally that started with a back-to-school bump, pushed through the choppy holiday season and has survived brutal winter weather and Middle Eastern unrest at the start of 2011 proved to be resilient enough Tuesday to push the S&P Retail Index back over 500 and the Dow Jones Industrial Average above 12,000 for the first time in more than two-and-a-half years.
This story first appeared in the February 2, 2011 issue of WWD. Subscribe Today.
The retail index rose 0.8 percent, or 3.95 points, to 501.96, its first close above 500 since Jan. 27.
The Dow’s improvement was the more historic feat, its first close above 12,000 since June 2008. The Dow advanced 1.2 percent, or 148.23 points, to close at 12,040.16. The advance also was its strongest gain on a percentage basis since it was up 2.3 percent on Dec. 1.
Among the retail gainers were Saks Inc., up 2.1 percent to $11.97, and Kohl’s Corp., ahead 1.1 percent to $51.32. Vendors with strong upward movement included Lululemon Athletica Inc., up 6.6 percent to $73.20, and G-III Apparel Group Ltd., 5.2 percent to $36.71.
Despite the long recovery ahead — unemployment is still high at 9.4 percent — experts believe the rally is justified by the general improvement in the business climate.
“You’ve got easy monetary policy,” said Andrew Fitzpatrick, director of investment at Hinsdale Associates. “You’ve got the tax cuts that were extended. You’ve got really solid earnings, for the most part, and economic data that’s improving.”
Fitzpatrick said the Dow could hold onto 12,000.
“This rally has some legs to it and should continue,” he said.