(Updates to midday, changes byline)
* Strong May retail sales ease spending worry
* Oil retreat adds to positive tone
* Huge offer for Anheuser-Busch lifts sentiment
* Lehman shakes up executive ranks
By Cal Mankowski
NEW YORK, June 12 (Reuters) - U.S. stocks rose on Thursday
after government data showed a sharp increase in retail sales
last month, calming worries about the profit outlook, while
news of a $46 billion takeover bid for brewer Anheuser-Busch
boosted optimism about share valuations.
A pullback of almost $4 in oil futures added to the
positive tone, a day after the Dow fell 200 points amid fears
about higher energy prices stoking inflation.
Caterpillar Inc <CAT.N>, United Technologies <UTX.N> and
Boeing Co <BA.N> were the biggest contributors to the Dow's
advance.
The 1 percent jump in May retail sales was twice what Wall
Street economists expected, and even after taking out higher
prices paid for gasoline, sales rose a strong 0.8 percent.
The financial sector led the rally following news that
investment bank Lehman Brothers <LEH.N> replaced its chief
financial officer and its chief operating officer. The S&P
financial sector index <.GSPF> gained 2.8 percent.
Lehman shares, which had been up 2 percent to as high as
$24.44 in heavy trading earlier in the session, had slipped at
midday to down 0.5 percent at $23.64 on the New York Stock
Exchange.
"I think the retail sales number told us that maybe the
Fed has got it right here. The economy is not doing as poorly
as we thought," said Frank Lesh, analyst and broker at
FuturePath Trading LLC in Chicago. "Some of those rebate
checks are getting spent."
As for Lehman's news, Lesh said it was another sign that
financial firms are addressing their problems.
"It looks as if the real bleeding has stopped," he said.
The Dow Jones industrial average <> rose 123.84
points, or 1.02 percent, to 12,202.61. The Standard & Poor's
500 Index <.SPX> climbed 10.64 points, or 0.80 percent, to
1,346.13. The Nasdaq Composite Index <> gained 22.97
points, or 0.96 percent, to 2,416.98.
Shares of brewer Anheuser-Busch <BUD.N> jumped 5.5 percent
to $61.53 following news that the U.S. maker of Budweiser and
Michelob beers had received an unsolicited takeover bid from
Belgian rival InBev <INTB.BR>/
Other standouts included technology shares, with wireless
chip maker Qualcomm <QCOM.O> up 6.4 percent at $49.25 after
raising its quarterly profit outlook. Qualcomm was the
top-weighted gainer in both the Nasdaq 100 <> index and
the S&P 500 at midday.
Among retailers, Wal-Mart Stores Inc <WMT.N> shares shot
up 1.7 percent to $59.52. An S&P index of retailers' shares
was up 2.1 percent.
Boeing shares climbed 2.4 percent to $75.06 on the NYSE.
The U.S. aircraft maker said it is starting tests on cockpit
and cabin systems in its the first of its 787 Dreamliners.
Among financials, shares of Citigroup <C.N> gained 3.6
percent to $19.91 and JPMorgan Chase & Co <JPM.N> rose 2.7
percent to $38.13. Citigroup and JPMorgan ranked second and
third, respectively, among the S&P's major advancers in midday
trading.
Shares of Cummins Inc <CMI.N> surged 10.9 percent to
$70.03 after Caterpillar, the company's archrival in diesel
engines, said it would no longer compete in the North American
on-highway truck market.
Caterpillar's stock rose 3.1 percent to $81.41.
United Technologies shares added 3.2 percent to $68.78, a
day after the company's board authorized a stock-buyback
program for 60 million shares worth about $4 billion at
current prices. []
U.S. front-month crude <CLc1> slid $3.83 to $132.55 a
barrel on the New York Mercantile Exchange.
The market started Thursday's session at its most oversold
condition since early March, according to the 14-day relative
strength index of the S&P 500 index.
(Editing by Jan Paschal)
