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News at a Glance

• Retail Rebound: Sales rose in May for first time since February.
• Equities Rise: Major indexes higher after economic data.
• Foreclosure Record: Filings top 1 million from March to May.
• Boundless Energy: Crude oil prices top $72 a barrel.

The Lowdown

An improved economic picture gave Wall Street a boost.

Stocks quickly recovered Wednesday’s losses and then some after a surprise from the labor sector, a successful Treasury note auction and a nominal retail report helped offset another staggering month of home foreclosures. The Dow Jones Industrial Average picked up 31 points at 8770, just shy of turning positive for the year. The Nasdaq climbed 9 to 1862, and the S&P 500 rose 5 to 944. That level marks a new 2009 high for the S&P. 

Financials and health care stocks did particularly well, and the commodities rally continued, lifting the materials sector. Energy prices continued their run after the International Energy Agency raised its estimate for 2009 oil demand. Oil traded up $1.13 at $72.46 a barrel.

In economic news, the labor market showed more clear signs of improvement. Jobless claims fell last week below economists estimates, though they remained above 600,000. Meanwhile, the Treasury experienced strong demand for $11 billion worth of 30-year bonds it auctioned off. The yield was 3.83%. The auction was the last of three such sales this week. 

The retail sector offered lukewarm data. Retail sales rose in May, the first such increase since February, as consumers appeared more willing to spend. However, much of that increase came as a result of an increase in gas prices. A rebound in consumer spending is widely considered a necessary condition for a broader economic recovery.

Concern over the consumer may have been exacerbated by a report released Thursday by the Federal Reserve that showed Americans’ net worth fell by $1.33 trillion, about 2.6%, during the first quarter.

In housing, foreclosure filings slipped 6% in May, easing off a record high in April, RealtyTrac said. However, May marked the third worst month on record for foreclosures, as well as the third consecutive month during which filings came in above 300,000. Filings were highly polarized: ten states accounted for 77% of foreclosure activity last month. The states with the most culprits: California, Florida and Nevada.

The foreclosure report muddied the picture of a housing sector on the mend. Recent home sales and price data had suggested the market is slowly coming back.

In Washington, the Obama administration tapped Kenneth Feinberg as its new so-called “pay czar,” a post that will shape the landscape of executive compensation. Feinberg handled Washington’s compensation fund for the victims of the 2001 terrorist attacks.

World markets were fairly flat. In Asia, Japan’s Nikkei finished down 0.1%, while Hong Kong’s Hang Seng ended flat. In Europe, the U.K.’s FTSE picked up 0.6%.

Corporate News

• Coca-Cola (KO) is in the middle of an international incident. The government of Venezuelan president Hugo Chavez has banned Coke Zero, one of the company’s no-calorie colas. “The product should be withdrawn from circulation to preserve the health of Venezuelans,” Health Minister Jesus Mantilla said in comments reported by the state-run news agency.
• Dell (DELL) is getting ready to open its check book. The computer retailer is preparing to acquire “a significant-sized company,” Reuters reported, citing an anonymous source who had spoken with Dell.
• Zipcar, one of several companies that allows urban consumers to share a fleet of vehicles, plans to go public next year, Reuters reported. The firm predicts sales will grow to roughly $1 billion within a decade.

The Economy

• Retail sales rose 0.5% in May, rebounding from a revised April decline of 0.2%, the Commerce Department said. Sales excluding autos also rose 0.5%, up from a revised April dip of 0.2%. Overall May sales were in line with economists estimates, but sales excluding autos were expected to rise 0.2% last month. REPORT
• Initial jobless claims fell to 601,000 last week, down from a revised 625,000 in the prior week, the Labor Department said. Economists had predicted the number people seeking unemployment benefits for the first time would dip to 615,000. REPORT
• Business inventories, a measure of lag demand relative to expectations, fell 1.1% in April, down a bit from a revised March decline of 0,9%, the Commerce Department said. For April, economists had projected another 1.0% decline. REPORT

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