* Spending, durable data weak, but not as bad as feared
* Retail, airline stocks jump as crude oil falls
* Dow, S&P up 0.6 pct, Nasdaq up 0.2 pct
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(Updates to 1 p.m. early close, changes byline)
By Deepa Seetharaman
NEW YORK, Dec 24 (Reuters) - U.S. stocks rose in a
holiday-shortened session on Wednesday after a barrage of
economic data signaled the economy was weak, but not as bad as
feared, while the fall in crude oil prices and bargain hunting
helped retail and airline stocks.
The Dow snapped a five-day losing streak, while the S&P
500 and the Nasdaq reversed two days of declines.
Extremely low volume -- the lightest since Dec. 26, 2003
-- helped enhance the market's gains in the abbreviated
Christmas Eve session.
Among the stocks helped by cheaper oil prices were U.S.
Airways <LCC.N> and Target Corp <TGT.N>. The airline index
<.XAL> was up 2 percent, while the S&P 500 index of retail
stocks <.RLX> also rose about 1 percent.
A government report showed U.S. consumers cut spending for
the fifth straight month in November, while incomes shrank,
suggesting intensifying recessionary pressures. For details,
see []
Still, the data was not as bad as feared, sparking a
glimmer of hope that the economy had seen its worst. Data that
showed U.S. mortgage rates fell to the lowest level in 37
years and applications for mortgage loans hit a five-year high
also offered some reason for optimism. []
"The expectation is that we are in the worst of what we're
going to see in terms of GDP growth and earnings growth," said
Scott Wren, senior equity strategist at Wachovia Securities,
in St. Louis.
"All the things the Fed is doing and the Obama
administration is going to do are going to be good, and people
are starting to look at that."
The Dow Jones industrial average <> rose 48.99 points,
or 0.58 percent, to end at 8,468.48. The Standard & Poor's 500
Index <.SPX> added 4.99 points, or 0.58 percent, to 868.15.
The Nasdaq Composite Index <> climbed 3.36 points, or
0.22 percent, to close at 1,524.90.
Trading ended at 1 p.m. (1800 GMT) on Wednesday in
observance of Christmas Eve. U.S. markets will be closed on
Thursday for Christmas Day. Trading will resume on Friday.
Among the day's more encouraging economic headlines, the
Commerce Department reported that consumer spending fell 0.6
percent, which was not as bad as the 0.7 percent drop expected
by economists polled by Reuters. Personal incomes slipped 0.2
percent, which economists had forecast as flat.
Durable goods orders, which are orders for long-lasting
manufactured goods such as washing machines and refrigerators,
fell 1 percent in November -- less than the decline of 3
percent forecast in a Reuters poll. [].
Data from Freddie Mac, one of the largest U.S. home
funding companies, showed the average interest rate on a U.S.
30-year fixed-rate mortgage had slid to 5.14 percent in the
week ending Dec. 24 -- the lowest in 37 years.
Veteran banking analyst Richard Bove of Ladenburg Thalmann
said housing prices are expected to stabilize and possibly
rise after a likely boom in mortgage refinance, spurred by the
fall in mortgage rates. []
Still little can prevent 2008 from being one of the worst
years for stocks on record.
After the U.S. stock market's early close on Christmas
Eve, there will be just four trading days left in the year.
The broad S&P 500 is down about 41 percent for the year. That
decline for the year is surpassed only by the drop of 47.1
percent during the Great Depression.
Among the gloomy news this morning, a Labor Department
report measuring initial applications for unemployment
benefits showed a 30,000 jump last week to a 26-year high of
586,000 versus the 556,000 in the previous week.
[]
Worries about the health of the U.S. economy-- the world's
largest -- continued to weigh on the price of crude oil, even
after U.S. inventory data showed an unexpected fall in crude
stockpiles in the latest week. U.S. crude oil futures for
February delivery <CLc1> lost $1.07, or 2.7 percent, to settle
at $37.91 per barrel. []
But cheaper oil prices, which could help businesses and
consumers with lower energy costs, also may have helped
improve investors' mood in the holiday-shortened session.
U.S. Airways rose 5.7 percent to $7.65 on the NYSE, making
it the leader of the airline index, while No. 2 placeholder
JetBlue Airways <JBLU.O> jumped 5.4 percent to $6.60 on
Nasdaq.
The drop in oil prices also helped retailers, which have
suffered steep losses amid concerns for retrenched consumer
spending. Shares of Target jumped 1.3 percent to $32.35 while
JC Penney Inc <JCP.N> rose 1.5 percent to $18.42.
The stock of Target rival Wal-Mart Stores Inc <WMT.N> rose
0.3 percent to $55.44 after the world's largest retailer said
late Tuesday that it had settled 63 class-action wage
lawsuits. []
Bargain hunting helped jumpstart the S&P index of
financial stocks <.GSPF>, which rose 1.9 percent. JPMorgan
Chase & Co <JPM.N> up 2.5 percent to $29.85, while fellow Dow
component Bank of America <BAC.N> jumped 6.1 percent to
$13.53.
Although lower oil prices have prompted some selling of
energy stocks in the past several sessions, the reverse was
true on Wednesday. Exxon Mobil <XOM.N> rose 0.9 percent to
$75.78 and Chevron <CVX.N> added 0.6 percent to $69.62.
U.S. markets will be closed on Thursday for Christmas
Day.
On the New York Stock Exchange, only 403.7 million shares
changed hands -- far below last year's estimated daily average
of 1.90 billion. On the Nasdaq, only about 516.2 million
shares traded, also well below last year's daily average of
2.17 billion.
Advancers outnumbered decliners on the NYSE by a ratio of
about 3 to 2, while on the Nasdaq, about seven stocks rose for
every six that fell.
(Editing by Jan Paschal)
