NEW YORK — Wall Street moved sharply higher Wednesday after the Commerce Department reported an unexpected increase in retail sales last month and eased some concerns about consumers’ willingness to spend despite economic uncertainty. The Dow Jones industrials rose nearly 180 points.
The 0.3 percent rise in January retail sales, which followed a drop in December, alleviated some of the market’s worries that consumers were retrenching because of rising fuel prices, a faltering real-estate sector and a choppy stock market. Analysts had expected a 0.3 percent decline in January sales.
However, another report from the department showed that U.S. business inventories grew a little more than expected in December.
The data could be a sign of an involuntary buildup of unsold goods on store shelves amid the economic slowdown.
The inventories report was not enough to offset optimism during the session. Stocks have mostly risen in recent days as investors tried to determine whether Wall Street has reached a bottom after months of declines related to the housing and credit crisis, or whether further sluggishness in the economy will send stocks lower.
“So far this week there has been a positive bias, but I think what you’re seeing is people taking a very cautious approach,” said Scott Fullman, director of investment strategy at I.A. Englander & Co. “There is no great rush to jump in, and the preservation of capital is more important than growth at this moment.”
He also said investors were encouraged by the government’s latest plan to help home owners falling behind on mortgage payments.
The Dow rose 178.83, or 1.45 percent, to 12,552.24.
Broader indexes also moved higher. The Standard & Poor’s 500 index added 18.35, or 1.36 percent, to 1,367.21, and the Nasdaq composite rose 53.89, or 2.32 percent, to 2,373.93.
Analysts said the market will likely be choppy as investors react to economic data through the next several weeks. Most important will be any reports that provides clues about the slumping housing market.
Michael Strauss, chief economist at CommonFund, said he’ll be listening today to see if Federal Reserve Chairman Ben Bernanke makes any projections about the housing market.
Bernanke is scheduled to provide testimony before a Senate committee on banking and housing at 8 a.m. MST.
“I think Bernanke will be grilled more on housing, and one of the things he’ll focus on is that the housing sector has had a much bigger impact on the economy than the Fed anticipated it would have,” Strauss said. “The question is whether he dangles a carrot, and maybe even praises Congress, about the fiscal stimulus package.”
