U.S. stocks closed higher on Tuesday, as Wall Street chalked up its strongest performance in 2014 after upbeat retail-sales data for December helped offset concerns that came with Friday's monthly jobs report.
"The biggest factor (driving the market) was the reassurance that people took from the retail numbers and the sales growth there. We're now shifting back to the basic idea that the jobs number was something of an aberration, so we can go back to the positive tilt we had," said Bruce McCain, chief investment strategist at Key Private Bank.
The Commerce Department report had
The gauge of consumer spending was viewed as particularly important in light of Friday's dismal jobs report for December, which had the government reporting the addition of 74,000 to nonfarm payrolls, far below estimates of about 200,000. The Bureau of Labor Statistics also reported the unemployment rate fell to from 7 percent to 6.7 percent, with decline chalked up to the high number of those not actively looking for work.
But Randy Frederick, director of trading and derivatives at Charles Schwab, says the participation rate, while low, was the same as in October, when the unemployment rate stood at 7.2 percent. "The market seemed to take it as a very negative report, but the unemployment rate dropping should have been positive. It's not just a number and a rate, there's a lot more to it than that," he said.
JPMorgan Chase and Wells Fargo gained after reporting fourth-quarter results. Time Warner Cable rose after spurning a bid from Charter Communications. Google advanced after saying it would purchase digital-thermostat manufacturer Nest Labs for $3.2 billion. Tesla Motors surged after deliveries of its Model S sedan in the fourth quarter topped what the electric-car maker had forecast. Gamestop fell sharply after the video-game retailer projected