By Donna Kardos Yesalavich, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks opened slightly higher
Tuesday as investors were encouraged by a bigger-than-expected rise
in U.S. retail sales for November, but a disappointing earnings
report from Best Buy limited the gains.
The Dow Jones Industrial Average (DJI) rose 30 points, or 0.3%,
to 11459. Among its top performers, Walt Disney (DIS) added 0.7%
while Bank of America (BAC) climbed 0.6% and Caterpillar (CAT) rose
0.5%.
The Nasdaq Composite (RIXF) rose 0.2% to 2630. The Standard
& Poor's 500 index (SPX) added 0.2% to 1243, with its
health-care sector in the lead. The sector was boosted by a 4.7%
increase in Amgen (AMGN) after the biotechnology firm said a study
of its bone drug Xgeva showed it helped prostate-cancer patients
live longer without the disease spreading to their bones.
Consumer stocks were also strong, with Hasbro (HAS) rising 1%,
Target (TGT) advancing 0.7% and Tiffany adding 0.4%. Lifting the
sector, the Commerce Department reported a 0.8% increase in U.S.
retail sales for November, topping economists' expectations for a
0.5% rise. Auto and parts sales fell by 0.8% in November, after
surging 5.6% during October. But excluding autos, retail sales in
November rose 1.2%, topping expectations for a gain of 0.7%.
While the retail sales provided some encouragement, investors
remain cautious on the outlook for the retail sector after Best Buy
(BBY) issued a dour report for the quarter ended Nov. 27, which
included Black Friday. Best Buy's same-store sales fell 3.3% in the
quarter, including a 5% drop in the U.S. Its earnings came in well
below analysts' estimates as revenue unexpectedly fell. The
consumer electronics retailer also cut its earnings view for the
year. Best Buy's shares tumbled 14%.
Separate data showed U.S. producer prices increased more than
expected last month, pushed higher by rising energy and food costs,
while underlying wholesale inflation remained tame. The index of
producer prices, which measures how much manufacturers and
wholesalers pay for goods and materials, rose a seasonally adjusted
0.8% in November from October, the Labor Department said. It was
the biggest gain since March and the fifth monthly increase in a
row.
Tuesday's activity comes as investors await the Federal Open
Market Committee's latest policy statement, due at 2:15 p.m. EST.
The market isn't expecting any changes in the FOMC's policy
direction, but will keep a close eye on the language it uses to
assess the economy and how its $600 billion stimulus package is
faring so far.
The euro rose to $1.3398, from $1.3392 late Monday, as data
showed German economic expectations improved for the second
consecutive month in December, allaying immediate concerns about a
deepening debt crisis in the euro zone's periphery. The ZEW
think-tank said its closely-watched economic expectations index
increased to 4.3 points in December, up from 1.8 points in November
and above economists' forecasts for a reading of 4.0 points.
The U.S. Dollar Index (DXY), tracking the U.S. currency against
a basket of six others, edged up 0.1%. Treasurys fell, lifting the
yield on the 10-year note up to 3.35%. Crude-oil futures slipped
while gold futures also declined.
Among stocks in focus, HCP (HCP) slipped 1% after the
real-estate investment trust said it will buy all of the
real-estate assets of privately owned nursing-home operator HCR
ManorCare for $6.1 billion in a cash-and-stock deal.
Sanderson Farms (SAFM) rose 2.5%. The poultry producer's fiscal
fourth-quarter earnings more than doubled as average market prices
rose 3.2% and margins improved.