Retail sales news moves markets upward
NEW YORK -- Stocks on Friday advanced for the first time in three days after retail sales rose more than economists forecast.
General Motors Corp., the world's biggest automaker, climbed to a three-year high on prospects for cost cuts.
BEA Systems Inc. jumped the most since its 1997 initial public offering after Oracle Corp. bid to buy the software maker.
The S&P 500 increased 7.39, or 0.5 percent, to 1,561.8, completing its fifth straight weekly advance.
The Dow Jones industrial average rose 77.96, or 0.6 percent, to 14,093.08 and the Nasdaq added 33.48, or 1.2 percent, to 2,805.68.
U.S. retail sales expanded by 0.6 percent in September, more than the 0.2 percent projected by economists polled by Bloomberg, providing more evidence the housing slump won't spur a recession.
A separate government report showed producer prices excluding food and energy gained less than estimated.
"The overall impact on the entire economy and markets from housing has been exaggerated," said Robert Carey, who oversees about $34.5 billion as chief investment officer at First Trust Portfolios LP in Chicago. "Valuations on balance are still on the low side for equities."
The S&P 500 is valued at 18.1 times total earnings, 32 percent below its average this decade, according to data compiled by Bloomberg.
General Motors Corp. jumped $2.65, or 6.6 percent, to $42.64 for the biggest gain in the S&P 500. JPMorgan Securities Inc. analyst Himanshu Patel said the largest U.S. automaker may report better-than-expected savings from its United Auto Workers agreement.
BEA Systems surged $5.20, or 38 percent, to $18.82 after Oracle offered $6.7 billion, or $17 a share, 25 percent more than BEA's closing price on Thursday. BEA said Friday the offer is too low and investors speculated more suitors will emerge.
Oracle, the world's third-largest software maker, slipped 2 cents to $22.44.
"We're starting to see more mergers and acquisitions and the numbers on the economy looked pretty strong," said Jerome Dodson, president of Parnassus Investments, which oversees $1.4 billion in San Francisco. "The stock market is going to continue to move higher."
The S&P 500's fifth straight weekly gain is its longest streak in five months. The benchmark for American equity rose 0.3 percent over the last five days.