Dow Average caps longest rally since 1996 as retail sales gain

U.S. stocks rose, sending the Dow Jones Industrial Average to its longest rally since 1996, as data showing retail sales increased in February by the most in five months bolstered optimism in the world’s largest economy.

Best Buy Co. and Abercrombie & Fitch Co. climbed at least 2.7 percent as retailers advanced. Netflix Inc. jumped 5.6 percent after announcing new social features integrated with Facebook Inc. International Business Machines Corp. gained 0.7 percent to a record. BlackBerry surged 8.2 percent after announcing its largest purchase order ever.

The Standard & Poor’s 500 Index rose 0.1 percent to 1,554.52 at 4 p.m. in New York. The Dow added 5.22 points, or less than 0.1 percent, to 14,455.28. The 30-stock gauge reached another record high and capped its ninth straight gain, the longest winning streak since November 1996. About 5.5 billion shares traded hands on U.S. exchanges today, 13 percent below the three-month average.

“All the economic data is incrementally positive,” Dan Veru, chief investment officer at Palisade Capital Management LLC, said over the phone. The Fort Lee, New Jersey-based firm manages about $3.6 billion. “Even if we do have a pause in the market or a correction, how deep can that correction be? Because I think there’s a lot of people, a lot of investors, waiting to get into the market.”

The S&P 500 is about 11 points from its record of 1,565.15 set in October 2007. The benchmark index fell yesterday, ending a seven-day winning streak. The gauge has more than doubled from its bottom in 2009 as the rally was fueled by corporate earnings that topped estimates and monetary stimulus from the Federal Reserve. The Dow has set record closing highs for seven straight days.

Index Records

While the S&P 500 remains less than one percent below its record, the Russell 2000 Index of smaller companies advanced 0.4 percent to an all-time high of 943.90 and the Dow Jones Transportation Average climbed 1.6 percent to a record 6,232.59 today. The Morgan Stanley Cyclical Index also topped its previous high, adding 0.5 percent to 1,171.95.

The S&P 500 is valued at 15.4 times reported earnings, a 22-month high, according to data compiled by Bloomberg. That’s still 7.2 percent below an average of 16.6 over the last decade. The Dow is trading at a price-to-earnings ratio of 14.1, the highest level in almost two years and 11 percent below its 10- year average of 15.8.

U.S. equities rose today as Commerce Department figures showed a 1.1 percent advance in retail sales in February, more than forecast and followed a revised 0.2 percent gain in January. The median projection in a Bloomberg survey called for a 0.5 percent advance. Sales excluding the volatile categories of automobiles and gasoline climbed 0.4 percent.

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