U.S. retail stocks established a new high today and the Dow Jones Industrial Average closed above 13,000 for the first time since 2008 — a psychological victory aided by a better-than-expected reading on consumer confidence.
The Dow—which broke through the 13,000 mark during the six prior trading sessions, but slipped back down each time — closed up 23.61 points to 13,005.12. The S&P Retail Index increased 1.7 percent, or 9.81 points, to 584.03, setting an all-time high of 584.45 in midday trading. The sector was supported by strong gains by Office Depot Inc. and the index easily passed its previous peak of 577.59, set last week.
Among the gainers were Aeropostale Inc., up 5.3 percent to $18.46; Joe’s Jeans Inc., 4.5 percent to 70 cents; The Talbots Inc., 3 percent to $3.14; Vera Bradley Inc., 2.8 percent to $36.72; American Eagle Outfitters 2.8 percent to $14.65, and Gap Inc., 2.8 percent to $23.71. The Conference Board’s Consumer Confidence Index rose to 70.8 for February from 61.5 a month earlier, far higher than economists’ consensus estimate of 63. Both components of the Index saw gains, with the present situation portion rising to 45 from 38.8 and the expectations side up to 88 from 76.7.
Sentiment is at its highest level since February 2011, when the index hit 72.
“So far, rising gasoline prices have not sapped consumer confidence,” said Maury Harris, economist at UBS. “While the related hit to real incomes from rising gasoline is undeniable, apparently, to date, perceptions of a better job market have been more important for consumers than higher gasoline prices.”
A gallon of regular gasoline averaged $3.72 Tuesday, up from $3.42 a month ago, but still well below the July 2008 high of $4.11, according to AAA.
In Europe, markets made marginal gains against a backdrop of mixed Euro zone news.
Credit watchdog Standard & Poor’s downgraded Greece’s debt to “selective default” status because of the 53.5 percent loss the country asked its creditors to take on its sovereign bonds. On a more positive note, Portugal fulfilled European Union, European Central Bank and International Monetary Fund requirements for another round of bailout funds. The country, which has been slashing labor costs, will receive $19 billion.
The DAX in Frankfurt led the upward movement, rising 0.6 percent to 6,887.63, followed by CAC 40 in Paris, which climbed 0.4 percent to 3,453.99. The FTSE 100 in London and the FTSE MIB in Milan both advanced 0.2 percent, to 5,927.91 and 16,345.30, respectively.
Gaining ground were Asos.com, up 2 percent to 18.41 pounds; Burberry Group, 1.4 percent to 14.10 pounds; Carrefour, 2.2 percent to 18.30 euros, and LVMH Moët Hennessy Louis Vuitton, 1.5 percent to 126.55 euros.
The euro traded at $1.35, while the pound traded at $1.59.