Zero Percent Financing
Retail sales rose 7.1% in October, the highest level
since the Commerce Department’s current method of tabulating began.
The bulk of the jump came as consumers took advantage of 0% financing for
automobiles. Excluding automobiles, retail sales rose 1% in October.
The surge in sales surprised forecasters, who
expected just a 2% rise in overall sales and flat results excluding autos.
Although markets are trading narrowly mixed, the report suggests consumers
are willing to open their wallets if the price is right and despite low
consumer confidence levels. The report also increases the chance for an
earlier economic rebound.
The Dow is up 23 at 9775, the S&P 500 is down
2.93 at 1136.16, and the Nasdaq Composite is down 8.87 at 1883.24.
The market continues to look ahead, today forgiving
Hewlett-Packard
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from a year earlier. But pay cutbacks, layoffs and slightly stronger sales
in all of its divisions seemed to send a positive message to investors that
the worst may be over for the second biggest computer maker. Hewlett is the
biggest gainer on the Dow, up 5% at 21.50.
Oil service stocks
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threw in the towel on efforts to get non-member countries to cut supplies in
an effort to shore up falling oil prices. December New York crude oil
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Amazon.com
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shaping up to be one of its 10-best volume days of the year, up 22%, or
1.61, at 8.91. In line with implications from today’s retail sales report,
the perception is that broader Internet shopping acceptance, coupled with
the expectation that fewer people will be traveling this Christmas (holiday
season), will boost sales at the online retailer. Today’s report shows
consumers are willing to spend if they get a deal. Recent sales figures from
discounters such as Wal-Mart have also outperformed pricier outlets,
emphasizing consumers’ price consciousness. Amazon recently partnered with
discounter Target, a move that will expand its line of cheap product
offerings available via the Internet this holiday season.