Stocks rise in Black Friday retail rush
U.S. stocks rallied on Black Friday, the unofficial start of the holiday shopping season. Across the U.S., retailers have worked hard to lure in shoppers with promotions and earlier store opening hours. The day, which is crucial for the industry, offers a glimpse of the level of consumer enthusiasm for the shopping season; 70 percent of U.S. economic activity is tied to consumer spending.
Separately from Black Friday, traders were encouraged by positive economic news from Germany and China, two engines of global growth.
The Dow Jones industrial average jumped 173 points, closing at 13,009. It was the first time since early November that the Dow closed above the 13,000 mark. The Standard & Poor's 500 closed at 1,409, up 18 points. And the Nasdaq composite index finished the trading session at 2,966, gaining 40.
The market closed early at 1 p.m. EST due to the Thanksgiving holiday weekend.
German business confidence rose unexpectedly in November after six straight declines, a closely watched survey showed, raising hopes that Europe's largest economy can continue to weather the continent's financial crisis.
Munich's Ifo institute said its key business climate figure rose to 101.4 in November from 100 in October. Economists had predicted a modest drop.
China's manufacturing expanded for the first time in 13 months in November, the latest sign that the world's second-biggest economy is recovering from its deepest slump since the 2008 global crisis. HSBC Corp. said its monthly Purchasing Managers' Index improved to 50.4 for November. Any number above 50 indicates expansion.
The PMI measures overall manufacturing activity by surveying indicators including orders, employment and production. The result was released Thursday, when the U.S. market was closed for Thanksgiving.
Around the U.S., shoppers flocked to malls and logged on to computers to take part in the annual cheer-fueled retail rush known as Black Friday.
Many stores opened earlier than ever. Target and Toys R Us opened on Thanksgiving evening. Retailers are also trying to draw shoppers with free layaway and shipping, by matching prices of online rivals and by beefing up mobile shopping apps.
Retail is a key driver of the U.S. economy. November and December, which can account for as much as 40 percent of a retailer's annual revenue, are crucial for stores.
The Friday after Thanksgiving, known as Black Friday, is a day in which retail stores have enough sales to put them "in the black" - an accounting expression alluding to the practice of recording losses in red and profits in black. Traders will be looking for signs about how enthusiastically Americans are spending. That could reflect the momentum of the economic recovery.
Among the stocks making big moves:
- Research in Motion Ltd. jumped on growing optimism for an earlier-than-expected launch of its delayed BlackBerry 10 smartphone. A senior executive from the Canadian company said earlier this month that Research In Motion, or RIM, will release the latest version of its smartphone "not long after" a Jan. 30 event. One analyst saw that as an indication that the products are to be unveiled in February. U.S.-traded shares of RIM rose $1.40 to $11.66.
- MAP Pharmaceuticals spiked after the company announced that the Food and Drug Administration will review its experimental migraine drug Levadex. The stock rose $2.60, or 20 percent, to $15.42.
- KIT Digital Inc., a video software and technology company, lost more than half its value after the company's former chief executive accused it of blaming prior management for its financial problems. Two days earlier, KIT said it would restate its financial results because of accounting errors. The stock lost $1.33, or 64 percent to 74 cents.