Stock exchange traded funds (ETFs) rose Wednesday ahead of some key U.S. corporate and economic news, recovering most of the hefty losses from the previous day, when investors worried about the nuclear crisis in Japan.
- Consumers spent more in March on furniture, electronics and at restaurants, but also paid more for gas. Retail sales increased 0.4% last month, the Commerce Department said Wednesday. It was the ninth consecutive monthly gain. The increase shrank to a 0.1% when sales at gasoline stations were excluded. Still, the biggest decline in auto sales in more than a year also pulled down overall sales. When taking out sales at gas station and of autos, retail sales rose 0.6%. Many analysts considered that a solid gain, given the jump in gas prices and the fact that Easter is coming later this year. They also noted that sales in the previous two months were revised up to show slightly better gains. The SPDR S&P Retail ETF (NYSEArca: XRT) is flat early Wednesday.
- The dollar pared losses against the euro and added to gains against the Japanese yen on Wednesday, keying on a government report that showed some measures of U.S. retail sales improved more than expected in March. The dollar index which measures the U.S. unit against a basket of six other currencies, traded at 74.836, little changed from 74.847 in late North American action Tuesday. Decent consumer spending supports expectations that the Federal Reserve is preparing for an eventual tightening of U.S. monetary policy, for which some central bank officials have voiced strong support in recent weeks. That could leave the dollar to drift back toward buying just 83 yen, said Boris Schlossberg, head of currency research at GFT, in emailed comments. The PowerShares DB U.S. Dollar Index Bullish (NYSEArca: UUP) is flat in early trading.
- European stock markets rebounded on Wednesday from prior-day losses, inspired by a potentially strong start for Wall Street and led by gains for Alcatel-Lucent SA after a broker upgrade. The pan-European Stoxx 600 index jumped 1% to 297.12 in afternoon trading. It fell 1.7% on Tuesday. Gains for Europe came despite economic data that showed industrial production in the Euro zone rose 0.4% in February, short of an increase of 0.8% expected from economists surveyed by Dow Jones Newswires. Analysts at Capital Economics said the data indicate that recovery in the sector is starting to lose momentum, and industrial production won’t match last year’s strong growth if the Euro remains strong. With that and tighter fiscal monetary policy, “we still expect Euro-zone GDP growth to slow to a snail’s pace in the second half of the year,” they said. The iShares MSCI United Kingdom Index (NYSEArca: EWU) gained 1% so far on Wednesday.
Gregory A. Clay contributed to this article.
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