The S&P 500 Breaks 1,410

The stock market is up a little bit today thanks to some good economic news. The Commerce Department said that retail sales for July rose by 0.8%. That topped Wall Street’s estimate which was at 0.3%. The down note in the report is that retail sales for June were revised down to a drop of 0.7%. Bloomberg noted that there was strength across the board—all 13 categories of retail sales increased last month.

Once clue that the high-end of the market is doing well is that Saks ($SAKS) reiterated its sales forecast for the rest of this year. That’s a notable sign of confidence given the company’s rather weak Q2 earnings report.

The Labor Department reported that wholesale inflation rose by 0.3% last month. What’s interesting is that energy costs dropped by 0.4%. That’s the fourth monthly drop in a row. Remember that the lower prices at the pump often (but not always) translate to more cash in the pockets of consumers. Tomorrow we’ll get the report on consumer inflation.

The economic report this morning showed that business inventories increased by 0.1% in June. I don’t think there’s a major takeaway from this report (June is rather dated now) but it’s interesting that companies are keeping a tight lease on production. No one wants to churn out a bunch of stuff only to have it sit on a shelf in a warehouse. That costs money so companies are still a bit weary of shifting production into high gear.

The S&P 500 broke 1,410 this morning. If that holds up, it will be our highest close since early April. The closing high was 1,419.04. If (when) we take that out, it will be the highest close in more than four years.

The Buy List is doing fairly well this morning. I see that JPMorgan Chase ($JPM) got as high as $37.64 today. That’s very close to a post-Whale high. I must sound like a broken record about Ford ($F) but I think the stock is very cheap. On August 2, share of Ford got as low as $8.82. That’s truly amazing. Ford is finally showing some strength as it’s up over $9.50 today.

I’m also holding out hope for Harris ($HRS). The stock has rallied for nine days in a row but it’s down slightly today.

Posted by on August 14th, 2012 at 10:29 am


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