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By Jennifer Yousfi
Fueled in part by strong markets overseas, U.S. markets closed the day with gains on the glimmer of hope investors found in a slight increase in consumer spending.
At the New York close yesterday (Wednesday), the three major U.S. stock indices posted gains. The blue-chip Dow Jones Industrial Average Index was up 175.58 points (1.42%), to trade at 12,548.99. The tech-laden Nasdaq Composite Index increased 53.89 points (2.32%), to reach 2,373.93. And the broader Standard & Poor's 500 Index rose 17.99 points (1.33%), to settle at 1,366.85.
The Commerce Department announced yesterday (Wednesday) that retail sales increased by 0.3% in January with gains in spending on autos, clothes and gasoline, Bloomberg reported. The increase follows a 0.4% decrease in December, which had sparked recession worries. Purchases excluding automobiles and gasoline were flat.
"Today's report will diminish recession anxieties, but it doesn't dispel them altogether,” Richard DeKaser, chief economist at Cleveland-based National City Corp., told Bloomberg.
The market reacted favorably to the report, as consumer spending accounts for 70% of U.S. Gross Domestic Product (GDP). All sectors posted gains, while energy [up 2.44%] and technology [up 2.55%] were the biggest gainers.
In foreign trading, there were gains across the board with the exception of the U.K. FTSE indices. Japan's Nikkei 225 Index was up 46.34 points to close at 13,068.30. Hong Kong's blue-chip Hang Seng Index gained 247.88 points to close at 23,169.55.
In Europe, the Paris-based CAC40 gained 14.69 points to close at 4,855.40 and the Frankfurt-based DAX inched up 5.83 points to close at 6,973.67. London's FTSE 100 fell 29.9 points to settle at 5,880.1 and FTSE 250 fell 44.1 points to close at 9,996.1. Both indices were dragged down by banking shares as U.K. mortgage lender Bradford & Bingley PLC took a $184 million (94 million pounds) write-down causing its shares to plunge 23%.
At 4:00pm ET, the dollar had gained against the yen [up 1.008%] but lost ground to the both the euro [-0.233%] and pound sterling [-0.550%].
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