Wall Street ended the week with a sturdy advance Friday, mounting a late-day rally as mild inflation data and improving retail sales created a brighter economic picture and strong quarterly earnings at General Electric Co. bolstered the gains.
Stocks rose after the Labor Department said its core consumer price index grew just 0.1 percent in September, a sign that higher prices have so far been limited to the volatile energy sector. Accounting for energy and food, which are excluded from core inflation, the CPI jumped 1.2 percent.
Investors also welcomed a turnaround in September retail sales that signaled consumers are still spending despite fears of a slumping economy. The market slipped after the University of Michigan said its consumer sentiment index declined for the fourth straight month, but regained its footing soon afterward.
Michael Strauss, chief economist at Commonfund, said that while the core CPI escaped the impact of soaring oil prices last month, that effect should soon work its way into prices elsewhere.
“The market probably did a reasonably good job anticipating this pickup in inflation,” Strauss said. “Investors are relieved there wasn’t more pressure on core inflation. Unfortunately, we’re probably going to see that pressure in the upcoming months.”
The Dow Jones industrial average finished at the highs of the day, up 70.75 points, or 0.7 percent, while the broader Standard & Poor’s 500-stock index was up 9.73 points, or 0.8 percent. The Nasdaq composite index, full of technology stocks, added 17.61 points, or 0.9 percent.
The major market indexes finished lower for the week. The Dow lost 0.1 percent, the S&P 500 index slid 0.8 percent and the Nasdaq composite dropped 1.2 percent.
Oil prices fell more than $1 amid indications of weak U.S. gasoline demand and reports that more Gulf Coast refineries are coming back on line after being shuttered because of hurricanes Katrina and Rita.
The Commerce Department said Friday that retail sales grew 0.2 percent in September after declining 1.9 percent the month before. But setting aside auto sales, which slumped after incentives boosted summertime demand, retail sales jumped 1.1 percent, compared with economists’ target of 0.8 percent.
In earnings news, GE said its quarterly profit grew 15 percent despite losses from the hurricanes, as earnings expanded at a double-digit rate across all of its businesses. Revenue was 9 percent higher while orders increased 11 percent, the company said. GE shares rose 32 cents to $34.34.
UnitedHealth Group Inc., one of the nation’s biggest health insurers, posted a 21 percent jump in quarterly earnings and topped Wall Street estimates by a penny, citing improvements in each of its business segments. Shares of UnitedHealth rose $2.23 to $56.43.
Medical device maker Boston Scientific Corp. fell 44 cents to $23.86 after reporting a $269 million third-quarter loss largely caused by a massive $600 million legal settlement, but also tied to falling sales of its heart stents. Even without one-time items, Boston Scientific’s earnings missed Wall Street targets by 2 cents per share.
Commodities broker Refco Inc. faced more pressure after the company said it is closing down its broker-dealer unit. On Thursday, Refco temporarily shut Refco Securities LLC because of a cash shortage, but the company insisted the unit was mostly unaffected by an accounting scandal involving Chief Executive Phillip R. Bennett. Refco shares were trading at $7.90 Thursday before being halted by the New York Stock Exchange.
Overseas, Japan’s Nikkei stock average dropped 0.2 percent. Britain’s FTSE 100 rose 0.2 percent, Germany’s DAX index gained 0.5 percent and France’s CAC-40 added 0.3 percent.