WALL STREET Positive retail sales report helps stocks to rebound

Wholesale prices also rose just 0.1 percent in September.
NEW YORK (AP) -- Stocks rebounded moderately Friday as a stronger than expected retail sales report showed that higher oil prices aren't scaring consumers away from spending. Federal Reserve Chairman Alan Greenspan's positive comments on oil prices also encouraged investors, but the major indexes finished the week lower after sharp declines the previous two sessions.
Wall Street has worried for months that soaring oil and gasoline prices would prompt consumers to spend less. But the Commerce Department reported that retail sales jumped 1.5 percent in September, much more than the 0.6 percent gain economists forecast.
Reassuring words from Greenspan, who said surging energy costs will have less of an impact on the economy than the energy crisis of the 1970s, cheered investors even as oil prices pushed toward $55 per barrel. A barrel of light crude settled at $54.93, up 17 cents, on the New York Mercantile Exchange.
"The retail sales figures were particularly good news and could have a strong impact in over all GDP [gross domestic product] growth," said Joseph McAlinden, chief investment officer at Morgan Stanley Investment Management. "And certainly Greenspan's opinion on the state of the world has helped."
Indexes
According to preliminary calculations, the Dow Jones industrial average rose 38.93, or 0.39 percent, to 9,933.38, regaining some ground after a 153-point drop over Wednesday and Thursday.
Broader stock indicators were modestly higher. The Standard & amp; Poor's 500 index was up 4.91, or 0.45 percent, at 1,108.20, and the technology-focused Nasdaq composite index gained 8.48, or 0.45 percent, to 1,911.50.
Despite Friday's gains, stocks ended the week lower. The sharp climb in crude oil futures weighed heavily on the markets during the week, siphoning investor enthusiasm from stocks just as third-quarter earnings season got under way. For the week, the Dow lost 1.21 percent, the S & amp;P 500 fell 1.24 percent, and the Nasdaq was down 0.44 percent.
Small price rise
Investors worried about inflation received good news Friday from the Labor Department, which said wholesale prices, as measured by the Producer Price Index, rose just 0.1 percent in September. While the PPI was up from the 0.1 percent decline in August, the figure was small enough to reassure Wall Street that inflation would not be a major problem for the foreseeable future.
"It's nice to see a bit of a rebound today, but it's not convincing in any manner," said Michael Palazzi, managing director of equity trading at SG Cowen Securities. "We're not going anywhere meaningful until the price of oil comes down. It's basically choking us."
Consumers seemed to share that sentiment, as high gas prices have driven down confidence in the economy. The University of Michigan's consumer sentiment index fell to 87.5 in October, down sharply from the 94.2 figure in September and far lower than Wall Street's expectation of 94.
Tech shares were flat earlier in the session as Juniper Networks Inc.'s newly acquired NetScreen computer security division posted a drop in revenue, leaving investors wondering about the strength of computer networking and security companies. Juniper slid $1.27 to $23.76.
Earnings announcements
In other earnings news, financial company Wachovia Corp. reported a 14 percent rise in third-quarter earnings due to gains in its high-end investment and wealth management businesses. Wachovia, which beat Wall Street forecasts by a penny per share, climbed $1.16 to $48.45.