S&P Steps Up Amid Frozen Retail Sales, Abating Dollar Concerns

[Guest Michal Vajcik]

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Wall Street posted solid gains on Thursday amid weak retail sales in February and temporarily shook off worries of a strong US dollar. Meanwhile, financials celebrated a pass mark from the Federal Reserve's (Fed) stress test.

 

"At least on a one-day basis we have a reprieve from the (strong dollar) - very much analogous to the decline we saw in oil prices," said Art Hogan, chief market strategist at Wunderlich Securities.

 

The Standard & Poor's 500 Index closed 1.26% elevated at 2,065.94 points.

 

 

Meanwhile, the Nasdaq Composite finished with a gain of 0.89% at 4,893.29 points and the Dow Jones Industrial Average rallied 1.47% to 17,895.28 points on Thursday.

 

''The market rebound is probably in response to a lot of folks who think the Fed will not be raising rates. The US economy seems to be cooling," RW Baird strategist Bruce Bittles noticed

 

Frozen retail sales

 

Headline retail sales in February saw the worst streak in nearly three years as severe weather conditions in February impacted daily life in the US. Retail sales missed expectations in February, as the latest report showed a deterioration of 0.6% month-on-month, although slightly better than the 0.8% fall posted in January.

 

Later in the day, the number of initial jobless claims hit 289,000 for the week ending March 7, sliding from an upwardly revised 325,000 seen in the previous week, while business inventories remained flat in January.

 

Finally, the monthly budget statement revealed a deficit of $192.3 billion for February, much wider than the gap of $17.5 billion in the first month of the year.

 

Bank's pass test

 

In the banking sector, the shares of Bank of America, Goldman Sachs and JPMorgan Chase were trading elevated ahead of the opening bell after the Federal Reserve approved the capital plans for 29 out of 31 global banks. The units of Deutsche Bank and Santander were the only exceptions.

 

Intel was one of the biggest losers in the morning, with the firm's shares plummeting 4.95% to finish at $30.73 after the company downwardly revised its revenue outlook for first quarter due weak demand for business personal computers.

 

PC maker Hewlett-Packard saw its shares unchanged at $32.60 as Barclays downgraded its shares to ''equal weight'' from ''overweight''. Barclays forecast that Hewlett-Packard's performance would be more severely impacted by the weak euro than originally assumed.

 

Retailer Dollar General issued a weaker-than-expected outlook for the current trading year amid increased competition. Its shares rose 3.81% to $74.18.

 

Drug maker Acadia Pharmaceuticals slumped 21.90% to $35.50 per share, after the company delayed seeking approval of its new Parkinson's drug.

 

Shares of software company Box dived 15.29% to $17.22 after posting late Wednesday a wider-than-expected loss for the fourth quarter.