Stock Market Today: Stocks Get a Lift on Solid Retail Sales

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The broader stock market gained ground today with investors bolstered by upbeat news from the retail sector.

For starters, data from the Commerce Department showed retail sales rose 1.7% in October, above the 1.3% increase expected by economists. "American retailers racked up their best month since the rebates-led spike in March, suggesting inflation has yet to clamp down on purchasing power," says Sal Guatieri, senior economist at BMO Capital Markets.

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While Guatieri says a continued rise in inflation could create bigger challenges for families on a tight budget, "for now, both consumers and the economy, in aggregate, look to cap the year on a high note."

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Adding to the bullish buzz were higher-than-expected earnings from blue-chip retailers Home Depot (HD, +5.7%) and Walmart (WMT -2.6%), with the latter saying inventory is up 11.5% year-over-year ahead of the holiday shopping season.

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At the close, the Dow Jones Industrial Average was up 0.2% at 36,142, the S&P 500 Index was 0.4% higher at 4,700 and the Nasdaq Composite had gained 0.8% to 15,973.

Other news in the stock market today:

The small-cap Russell 2000 rose 0.2% to 2,405.
U.S. crude futures slipped 0.2% to finish at $80.76 per barrel.
Gold futures shed 0.7% to settle at $1,854.10 an ounce.
The CBOE Volatility Index (VIX) eased back 0.7% to 16.37.
Bitcoin plunged 6.2% to $59,847.30. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.) "Today's action reminds us that markets are volatile and that there is always profit-taking and pullbacks," says Charlie Silver, CEO of Permission.io, a cryptocurrency-enabled provider of e-commerce permission advertising. "Short memories are a liability if you are a market participant. In July, Bitcoin hit $30,000 and has had a 100% rise in four months. This kind of appreciation is bound to see a 50% retracement. Leave trading to professionals who let the algorithms do the work. Avoid leverage and view pullbacks as opportunities."
Peloton (PTON) shot up 15.5% after the company said it would sell 23.9 million shares at $46 apiece – a discount to the stock's Nov. 15 close at $47.49 – raising $1.07 billion for the at-home fitness company. Even with today's pop, PTON stock remains roughly 64% lower on a year-to-date basis.
Rackspace Technology (RXT) surged 11.4% after the multi-cloud technology services company reported earnings. In its third quarter, RXT posted adjsuted earnings of 25 cents per share on $763 million on revenue, more than the 24 cents per share and $756 million analysts were expecting. Oppenheimer analyst Timothy Horan maintained his Outperform (Buy) rating in the wake of the results. "RXT is the only pure play cloud service provider and can pick and choose its customers," he wrote in a note. "Enterprise cloud adoption is early and accelerating. We believe RXT's managed services and software are best-in-class for multicloud and hybrid cloud deployments."

The Holiday Shopping Season is Just Ahead

Could today's earnings reports and economic data signal another strong holiday shopping season?

"We all know the worries," says Ryan Detrick, chief market strategist at LPL Financial. But today's data "is yet another reminder the U.S. consumer remains extremely healthy. Don't forget the consumer makes up two-thirds of the economy, so this is another great sign for our economy as we head into the holiday spending season."

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This could mean good news for retail stocks, but investors will need to choose wisely, especially with so many companies facing supply-chain disruptions and staffing shortages.

For those wanting a broader approach to the retail sector, here are three online retail ETFs worthy of a closer look.

And for investors looking for individual plays, here are 13 of the best consumer stocks to consider. Many of the names featured here are trading at new highs amid solid fundamentals and all of them have a lot to offer investors through the end of the year and beyond.

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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.