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NEW YORK (AP) — Stocks extended a rally Wednesday on signs that consumers are spending more this holiday season.
Major retailers reported stronger sales for November in the latest encouraging signal on the economy. Stocks added to their gains in mid-morning trading after the National Association of Realtors said the number of people who signed contracts to buy homes jumped 10.4 percent in October.
A variety of retailers beat Wall Street expectations for sales last month including Costco Wholesale Corp., Target Corp. and Limited Brands Inc., the owner of Victoria's Secret. Teen retailer Abercrombie & Fitch Co. jumped 7.9 percent after reporting that its sales soared 32 percent.
"The consumer is strong and month after month retailing has been very strong," said Ryan Detrick, the chief technical strategist at Schaeffer's Investment Research. "If you take a step back it's clear that the U.S. economy continues to slowly expand."
The Dow Jones industrial average rose 73.30, or 0.7 percent, to 11,329.68. The Dow jumped 2.3 percent Wednesday, its biggest gain since Sept. 1, on signs that private employers are adding jobs.
The Standard and Poor's 500 index rose 8.88, or 0.7 percent, to 1,214.95. The Nasdaq composite index rose 15.98, or 0.6 percent, to 2,565.54.
The strong reports from retailers overshadowed an unexpected rise in new claims for unemployment benefits. The Labor Department said new unemployment claims rose to 436,000 last week.
Shares rose overseas after the European Central Bank said that it will keep its benchmark interest rate at a record low 1 percent. Investors had hoped that bank would announce more purchases of bonds issued by struggling European countries including Ireland, Italy and Spain.
The Euro Stoxx 50 index, which tracks blue chip companies in countries that use the euro, rose 0.4 percent.
In corporate news, PepsiCo Inc. announced that will buy a majority stake in Wimm-Bill-Dann Foods for $3.8 billion. The acquisition makes the U.S. soft drink and snack maker the biggest food and beverage company in Russia.