Stocks posted their biggest gains in nearly two months on Tuesday as retail sales figures allayed fears over the economy that had driven a six-week slump in the market.
Many analysts said the rally was likely a one-day wonder. Though still weak, the retail sales data was not as bad as most had expected, which provided an excuse to buy after the market had neared its most oversold conditions in a year.
"It's the long-term trend which is still disturbing," said Alan Valdes, director of floor operations at DME Securities in New York. "If you look at the S&P 500, they've lost over $1 trillion in value since the beginning of May -- that is telling.
"We were so oversold you had to see a plus day."
Many headwinds remain, including concerns over debt problems in Europe and the United States, along with the expiration at the end of this month of the U.S. Federal Reserve's bond-buying program, which has been a key source of liquidity for markets.
U.S. retail sales declined for the first time in 11 months in May, but the fall was less than forecast. China data also helped to ease worries about global growth.
Gains were spread across the board, with the Morgan Stanley retail index (Chicago Options:^MVR - News), up 2.8 percent, among the best performers. Energy also outperformed, with the S&P energy sector (SNP:^GSPE - News) up 2 percent as oil
Dow Jones Industrial Average
(DJI: ^DJI )| Index Value: | 12,076.11 |
|---|---|
| Trade Time: | 4:02PM EDT |
| Change: |  123.14 (1.03%) |
| Prev Close: | 11,952.97 |
|---|---|
| Open: | 11,951.38 |
| Day's Range: | 11,951.38 -12,120.80 |
| 52wk Range: | 9,596.04 -12,928.50 |
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