Strong Retail Sales May Save the Dow's Winning Streak
Mar 13th 2013 1:08PM
Updated Mar 13th 2013 1:12PM
Some observers feared that higher payroll taxes in 2013 would hurt consumers, but new data released this morning should alleviate those worries. The Census Bureau posted retail sales numbers that rose 1.1%, beating economists' expectations of 0.5% growth. While a good portion of the gain owes to higher gas prices, the report indicated that Americans are not cutting back on their homes or vehicles.
While consumer spending is on the rise, so too is the Dow Jones Industrial Average is today: As of 12:55 p.m. EDT the index is up 13 points, or 0.09%. Meanwhile, the S&P 500 and the NASDAQ are up 0.14% and 0.12%, respectively.
Today's Dow downers
One surprising loser today is Home Depot . Shares are down 0.11% despite the overall positive retail sales numbers. The Census Bureau's report indicated that Americans spent more money at the home improvement stores in February than in January and that sales in this segment have increased on a year-over-year basis.
Shares of Home Depot are up more than 14% year to date and are currently just below their 52-week high. Today, it's likely that investors are simply taking money off the table.
The Census Bureau also reported that electronics stores posted lower sales in February than in January. Among computer and software stores, sales figures aren't available for February, but these stores performed worse in January than in previous months, on an adjusted basis. This may explain why shares of Hewlett-Packard and software king Microsoft are down slightly today.
Lastly, shares of Verizon are down 0.4% today. The stock is closing in on its 52-week high, and today's pullback may be the result of technical traders cutting their positions now that the stock has hit this threshold.
Long-term investors should stay on course and ride out this minor downturn, because greater things are likely on the horizon for shareholders. Recently, rumors have begun flying that Verizon Communications may be in talks to purchase the remaining 45% stake of Verizon Wireless from Vodafone. While this would load Verizon with a massive amount of debt, it would also free the company to make strategic decisions that Vodafone might otherwise hinder or block. Additionally, some investors believe this would strengthen Verizon's dividend over time.
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The article Strong Retail Sales May Save the Dow's Winning Streak originally appeared on Fool.com.Check back Monday thru Friday as Matt explains what caused the Dow's winners and losers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter @mthalman5513. Fool contributor Matt Thalman owns shares of Microsoft. The Motley Fool recommends Home Depot. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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