This Is the Reason the S&P 500 Is Off to the Races

Having fallen in five of the past six sessions, and with that one break being a meager 0.28-point rise, the broad-based S&P 500 (INDEX: ^GSPC  ) shook off last week's woes to head higher by a sizable 11.54 points (0.81%) to 1440.13!

Leading the charge higher was moderate U.S. retail sales growth of 1.1% in September according to the U.S. Commerce Department. Many analysts have tempered their expectations for U.S. sales growth, since a good chunk of this boost was more than likely the result of booming sales of Apple's (Nasdaq: AAPL  ) iPhone 5. However, it does represent tangible evidence that rising consumer confidence could be translating into actual consumer spending.

Citigroup (NYSE: C  ) is the other major component leading today's rally, up 5.5%. Unlike JPMorgan Chase and Wells Fargo, which were blasted following their third-quarter reports, Citigroup is soaring after surpassing Wall Street's estimates on lower loan loss reserves, lower expenses, and a rebound in its global consumer banking division, in spite of a 33% drop in revenue over last year. Growth may be coming at a premium for money center banks at the moment, but investors are showing that quality over quantity will be rewarded.

Let's take a quick glance at a two other companies within the S&P 500 that were an integral part in moving the index today.

Mobile tower companies such as American Tower (NYSE: AMT  ) were sending out positive vibes today following the announcement that Softbank will be taking a majority position in Sprint Nextel. Sprint has trailed its rivals Verizon and AT&T with regard to rolling out an advanced 4G LTE network, so this new cash infusion from Softbank is seen as a positive in that spending on 4G LTE, and data usage, are likely to ramp up in a big way. American Tower ended the day 4% higher on the news.

However, fun and games weren't to be had by all, as toymaker Hasbro (Nasdaq: HAS  ) dove 4% following a note from Goldman Sachs, which suggested selling the company as toy spending declines. The covering analyst, Michael Kelter, suggested that shares could fall up to 19% and backs up his assertion with historical trends of falling per-capita spending on toys since 1998. Today's retail sales data may prove Kelter otherwise, as might Hasbro's premium 3.7% dividend yield, but there's no denying that Hasbro has indeed missed Wall Street's earnings estimates twice in the past four quarters.

The weight of the world on Apple's shoulders?
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Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool owns shares of Wells Fargo, Apple, and Hasbro. Motley Fool newsletter services have recommended buying shares of Wells Fargo, Apple, American Tower, Godlman Sachs, and Hasbro, as well as creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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