* U.S. retail sales rise more than expected in November
* Fed still worried about the pace of recovery
* Best Buy cuts full-year outlook; shares slide
* Indexes up: Dow 0.7 pct, S&P 0.4 pct, Nasdaq 0.4 pct
* For up-to-the-minute market news see []
(Updates with Fed comments, changes byline)
By Ryan Vlastelica
NEW YORK, Dec 14 (Reuters) - U.S. stocks rose on Tuesday
after surprisingly strong November retail sales boosted
optimism about consumer spending in the holiday shopping
season, even as the Federal Reserve issued yet another cautious
statement about the economy.
The Fed, in a policy statement after its last scheduled
meeting of 2010, said the economic recovery was still too slow
to bring down unemployment and reaffirmed its commitment to
purchase $600 billion in bonds to stimulate growth and create
jobs, as had been expected. For details, see []
"I'm slightly disappointed that the (Fed) doesn't see the
world in the same light that investors do," said Andrew
Wilkinson, senior market analyst at Interactive Brokers in
Greenwich, Connecticut. "They're just being prudent, but it is
disappointing, though not concerning."
Sales at U.S. retailers rose 0.8 percent in November, up
for a fifth straight month and pointing to a firm rebound in
consumer spending, which accounts for roughly two-thirds of the
U.S. economy.
But shares of Best Buy Co Inc <BBY.N> took a beating after
the top U.S. electronics chain posted a third-quarter profit
that missed expectations and cut its full-year profit view,
denting optimism over the sector. Its shares plummeted 16
percent to $35.23.
Best Buy pressured the S&P retail index <.RLX>, sending it
down 0.2 percent. For details, see [] and
[]
"The data was encouraging overall and shows that retailers
are driving traffic into the stores," said Liam Dalton
president of Axiom Capital Management Inc in New York, which
oversees about $1.4 billion. "But Best Buy is a reminder that
there's a lot of discounting and market share being pulled in
several directions, meaning it could still be a choppy
Christmas season."
The Dow Jones industrial average <> was up 75.08
points, or 0.66 percent, at 11,503.64. The Standard & Poor's
500 Index <.SPX> was up 5.05 points, or 0.41 percent, at
1,245.51. The Nasdaq Composite Index <> was up 10.02
points, or 0.38 percent, at 2,634.93.
Healthcare stocks were boosted by company news. Medical
device maker C.R. Bard Inc <BCR.N> rose 4.6 percent to $90.06
after it forecast 14 percent yearly earnings growth in 2011,
while brokerages gave bullish marks to companies including
Amgen <AMGN.O> and Mylan Inc <MYL.O>. Amgen rose 4 percent to
$56.29 and Mylan added 4 percent to $20.64.
The S&P health care sector <.GSPA> rose 1.1 percent.
Yahoo Inc <YHOO.O> shares were little changed at $16.70 a
day after sources said the Internet company plans to lay off
more than 600 employees. []
Adding to positive sentiment, President Barack Obama's tax
plan got a boost on Tuesday when a top Democrat in the House of
Representatives, where the plan faces its stiffest resistance,
said there were "compelling reasons" to back it.
While passage of the bill, which extends all Bush-era tax
rates, is expected, many investors are waiting for confirmation
of its passage. []
Separate data on Tuesday showed U.S. producer prices rose
more than expected in November as energy prices spiked, but
underlying inflation pressures remained subdued. For data
wrap-up see [].
(Editing by Leslie Adler)
