NEW YORK—U.S. stocks rallied Monday, the first trading day since Black Friday, as investors and traders were encouraged by a record-breaking start to the holiday shopping season.
The Dow Jones Industrial Average gained 291 points, or 2.6 percent. The S&P 500 Index soared 2.9 percent, and the Nasdaq Composite Index gained 3.5 percent. By comparison, last week, the Dow dropped more than 500 points in five days.
Despite a lackluster economy and an unemployment rate north of 9 percent, shoppers came out in droves on Thanksgiving Day and Black Friday last week. Retailers nationwide gained more than $52.4 billion in sales last weekend, a whopping 16.4 percent increase from 2010, according to the National Retail Federation (NRF), a trade organization for retailers.
NRF’s survey, conducted by BIGresearch last weekend, found that a record 226 million Americans visited stores and websites over Black Friday weekend.
The average shopper spent $398.62, up from $365.34 last year, in stores and online.
The increase in sales is not entirely unexpected as retailers shifted their retail hours in an unprecedented manner—with many opening their doors on the evening of Thanksgiving Day to vie for consumers’ dollars. In addition, unseasonably mild weather nationwide further contributed to the outcome.
“Stuffed to the brim from their holiday meals and eager to shop, more consumers than ever turned out for retailers’ Black Friday promotions, a promising sign for the economic recovery,” said NRF President and CEO Matthew Shay in a statement.
“After a historic holiday weekend, retailers know the holiday season is far from over and will continue to look for ways to excite holiday shoppers and build on the momentum we’ve seen thus far.”
Most of the gifts bought last weekend were clothes and electronics, with electronics retailer Best Buy Co. Inc., discount chain Wal-Mart Stores Inc., and department store Macy’s Inc. expected to be the biggest gainers. The NRF survey also found that traffic in specialty retailers was also robust.
Last weekend’s trend may very well have continued Monday, dubbed Cyber Monday, a day which online retailers offer their biggest deals. Shares of Amazon.com Inc. were up sharply on Monday in anticipation of increased sales.
Dampening the mood a bit, some analysts wonder if the push for promotions and lower prices would hurt retailers’ bottom lines this year.
Investors are also keeping a close eye on developments out of Europe, where a worsening sovereign debt situation could threaten the viability of the eurozone bloc and its currency. A report by the Wall Street Journal, citing insiders, said that EU leaders are working on a new plan to tackle the lingering debt crisis, with stronger intervention from the European Central Bank.
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