Market Recap: Stocks Rally on Strong Thanksgiving Weekend Sales
Markets closed up on Wall Street today: Dow +2.59%, S&P +2.92%, Nasdaq +3.52%, Oil +1.20%, Gold +1.62%.
On the commodities front, Oil (NYSE:USO) climbed to $97.93 a barrel. Precious metals were also up, with Gold (NYSE:GLD) climbing to $1,715.90 an ounce while Silver (NYSE:SLV) rose 3.39% to settle at $32.15.
Today’s markets were up because:
1) Europe. Markets rallied today on hopes that euro-zone leaders will stitch together a new fiscal union mean to stabilize European Union. Investors hope the plan, being pushed by German Chancellor Angela Merkel and French President Nicolas Sarkozy — leaders of the euro zone’s two biggest economies — will open the way for the European Central Bank to bail out Italy and Spain.
2) Consumer spending. Reports of strong Black Friday weekend sales contributed to today’s broad rally. Major retailers reported record sales of $52.4 billion over Black Friday weekend — up 16% from last year — according to a survey by the National Retail Federation released Sunday. Retailers like Wal-Mart (NYSE:WMT), Home Depot (NYSE:HD), Best Buy (NYSE:BBY), Macy’s (NYSE:M), and Saks (NYSE:S) were trading higher today on the news.
3) Banks. As is the case with most broad rallies, the financial sector was the biggest beneficiary. Investors seem to have been left unfazed by a report today exposing the biggest financial firms’ reliance on the Federal Reserve’s bailout program, as the country’s six biggest banks — Morgan Stanley (NYSE:MS), Citigroup (NYSE:CS), Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), and Wells Fargo (NYSE:WFC) — were all trading higher, though they reportedly borrowed $460 billion from the Fed just to survive the crisis.