Market rallies to start week with triple-digit gain

Stronger than expected retail sales propelled the Dow Jones Industrial Average ($INDU) to a triple-digit gain on Monday, maintaining both the market's upward momentum from last week and optimism about the economic recovery.

By mid afternoon, major stock indexes rose more than 1%, with the Dow Jones industrial average jumping 155 points to hit a new 13-month high, and the Standard & Poor's 500 index breaking through the 1,100 mark, to 1,110. At the closing bell things had settled down a bit, with the Dow up 136.49 points, or 1.33%, to 10,406.96. The broader S&P 500 ($INX) gained 15.82 points, or 1.45% to finish at 1,109.30, while the tech-heavy Nasdaq Composite ($COMPX) rose 29.97, or 1.38%, to 2,197.85.
October sales numbers from retailers, including automakers, increased 1.4% from September – 1.7% below last year. The markets continue to latch onto any positive economic numbers, no matter how small, so long as things seem to keep moving toward the upside. Sales at clothing retailers were up 1.5 percent over last year and car dealers boosted sales 3.5 percent over last year and 8.3 percent higher than September –significant since those numbers were achieved without the "cash for clunkers" program.

Adding to the positive news were comments from Fitch Ratings' Director Grace Barnett, who told Reuters that the consumer goods sector should recover in 2010. She predicted that companies like Procter & Gamble Co. (PG), Avon Products (AVP), Kimberly-Clark Corp. (KMB), Clorox Co. (CLX), and Alberto Culver Co. (ACV) could see revenue growth of about 5% or more next year, depending on the strength of the dollar.

"Next year this industry will finally go back to normal, which is to have positive top line growth," she said ahead of the release of Fitch's sector report on Wednesday.

News that Japan's GDP rose at a robust annual rate of 4.8% in the third quarter also had the markets jumping. Analysts had forecast growth at below 3%, so the idea that good news in Japan could also mean good things for the U.S. took hold.

However, Federal Reserve Chairman Ben Bernanke, may have helped bring the markets back to earth with his forecast for "moderate" growth next year and his optimism that unemployment "may be getting worse more slowly." But Bernanke also said the Fed would be keeping rates low, and that was really all the markets wanted to hear.

The U.S. dollar continued its slide against other major currencies, while gold rose to a record $1,143.25 an ounce. Crude oil rose to settle at $79.08 a barrel.
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