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Companies that rely on consumer spending, like Lowe’s, TJX and Yum Brands, rose after the Commerce Department reported that retail sales had increased 1.1 percent last month. The government also revised sales growth in August up to 1.2 percent for the two largest gains since October 2010. Sales rose in most major categories. Electronics and appliances jumped 4.5 percent with help from Apple’s latest iPhone. Sales at auto dealers increased 1.3 percent. Building materials and garden supplies, furniture and clothing sales all gained, too.
“The retail sales numbers tell us that the economy in general, and consumer spending in particular, probably did better than most expected in the third quarter,” said Hugh A. Johnson, chairman and chief investment officer of Johnson Illington Advisors. Citigroup rose $1.91, or 5.5 percent, to $36.66 after beating Wall Street earnings estimates. Most other financial stocks rose with Citi. Bank of America was up 3.5 percent, and JPMorgan Chase shares increased 1.8 percent. However, Wells Fargo continued to struggle after reporting a record profit on Friday. Analysts warned that the bank might have trouble making money on interest payments for loans. Its stock fell 1 percent on Monday, after dropping on Friday, too.
Economic figures from China helped support markets in Europe at the start of a week that could offer greater clarity on the economic fates of Greece and Spain. China’s inflation rate fell to 1.9 percent in September, from 2 percent the month before, reinforcing investor hope for more economic stimulus there. Good news for two major drug makers supported pharmaceutical stocks and pushed the health sector to the biggest gains among 10 industry groups in the S.& P. 500.
Eli Lilly said a potential stomach cancer treatment met goals for improved patient survival. It has not yet submitted the drug, ramucirumab, for government approval. And Abbott Laboratories said an experimental drug regimen cured 99 percent of patients with hepatitis C. Patients in the trial had genotype 1 hepatitis C, the most common type in the Western world, and the hardest to treat. Eli Lilly stock rose $2.08, or 4 percent, to $52.53. Abbott shares rose $2.77, also 4 percent, to $72.05. Other drug makers also rose. Pfizer and Merck rose more than 1 percent and Bristol-Myers Squibb rose 2.5 percent.
Telecommunications stocks were the only declining industry in the S.& P. 500. A travel deals Web site operator, Travelzoo, fell again after its warning on Friday about third-quarter results. On Monday, its stock fell 85 cents, or 4.2 percent, to $19.17. Interest rates were flat. The Treasury’s benchmark 10-year note fell 3/32, to 99 20/32, and the yield rose to 1.67 percent from 1.66 percent late Friday.
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