U.S. Stocks Rise In Wake Of Retail-sales Data

NEW YORK (MarketWatch) -- After a day of upheaval, U.S. stocks on Friday moved into positive territory, with investors heartened by positive economic data that included healthy retail sales in September and in-line results from industrial bellwether General Electric Co.

"Economic news was good and retail sales are quite encouraging. However, there are inflationary pressures in the economy," said Peter Cardillo, chief market economist at Avalon Partners.

"Corporate news was in line with expectations," Cardillo said.

The Dow Jones Industrial Average advanced 70 points to 14,085.1, with 20 of its 30 components higher, led by General Motors Corp. , up 6%.

GE fronted the Dow's declines, with its stock off 2.2%.

The S&P 500 Index rose 5.96 points to 1,560.37, while the Nasdaq Composite Index gained 28.81 points to 2,801.01.

On the New York Stock Exchange, volume came to 718 million shares, with advancing stocks ahead of declining issues 5 to 3. On the Nasdaq, 1.4 billion shares were exchanged, and advancing shares topped decliners nearly 3 to 1.

Still spending

The Labor Department said that U.S. producer prices rose a more-than-anticipated 1.1% in September, but core inflation increased a tame 0.1%. .

"The headline data are a little stronger than expected and continue to show little impact on spending from the financial market turmoil," said analysts at Action Economics.

The Commerce Department reported U.S. retail sales were stronger than expected in September, climbing 0.6% in September.

In a later report, the Commerce Department said U.S. businesses built up their inventories in August from lean levels, with retail inventories climbing 0.5%.

Other data included a fall in consumer sentiment in October, with a monthly survey released by Reuters and the University of Michigan dropping to 82 from 83.4 in September. The lapse was greater than the 84.5 forecast by analysts. .

Active shares

News from the corporate front included General Electric reporting better than expected earnings for the third quarter, saying that it would hit Wall Street's targets for the coming period. .

Oracle Corp. shares were off 0.2% up in the wake of the software giant's $17 a share offer for business-software maker BEA Systems Inc. in a cash deal worth $6.7 million. BEA Systems shares were up 33.7%.

Other technology stocks rose as well, including arch Oracle rival SAP AG , up 1.6%, and Microsoft Corp. up 1.5%. .

Shares of Citigroup Inc. were down 1.6%, a day after the bank announced a shake-up.

Commodities

On the New York Mercantile Exchange, crude-oil futures edged higher on continued support from the first decline in U.S. crude supplies in three weeks. Crude for November delivery was recently up 59 cents at $83.67, after rising above $84-a-barrel level for the first time. .

Gold for December delivery fell $2.70 to $754.00.

Treasury prices fell sharply, with the benchmark 10-year note off 12/32 at 100 16/32, its yield climbing to 4.684%. .

The dollar gained against its major counterparts, with investors taking solid September retail sales as a signal the Federal Reserve might not cut rates again at month's end. The dollar index, which measures the greenback against a basket of major currencies, was up 0.14%. .

Overseas

Asian stocks declined Friday, tracking a reversal in U.S. stocks overnight, with Japanese shares slipping on weakness in exporters such as Sony Corp. and Nintendo Co. .

U.S. stocks on Thursday staged a dramatic reversal, closing lower after the Dow first hit record highs before plunging to a loss. Traders cited profit-taking in technology shares as the main culprit.

By Kate Gibson