The Dow Jones Industrial Average (^DJI 0.26%) finally woke up on the right side of the side bed this morning, as a promising retail sales report, good news abroad, and strong earnings from Citigroup (C +0.11%) combined to send the blue chips up 95 points, or 0.7%.
September retail sales grew by 1.1% sequentially, ahead of expectations of 0.7%. Electronics led all categories with a 4.5% bounce, helped by the release of Apple's iPhone 5. Sales were positive across the board, with drops only in department stores. The September figure represented a 5.4% increase from the total, and the Census Bureau also revised August's sales up by 0.3%
Outside the U.S., China reported that its inflation rate ticked down to 1.9% from 2% and exports grew by 9.9%, reassuring those nervous about a slowdown in the Middle Kingdom and also indicating that Chinese authorities have more room to ease monetary policy if need be. Optimism that Spain would ask for a bailout also appeared to build, and an EU summit later should shed some light on its prospects.
Finally, Citigroup added its name to the earnings beaters this quarter, posting an adjusted EPS of $1.06 on expectations of $0.96. Shares of the bank jumped 5.5%, leading financials higher as Bank of America (BAC 0.90%) climbed 3.5% and JPMorgan Chase (JPM +0.17%) followed with a gain of 1.8%. B of A CEO Brian Moynihan echoed Jamie Dimon of JPMorgan, saying the housing market is finally coming back today. Analysts are predicting a $0.07 EPS loss when the Charlotte, N.C.-based lender reports on Wednesday.
Other big gainers on the Dow included Merck (MRK 0.31%), Wal-Mart (WMT +0.95%), and Home Depot (HD +0.03%). The drugmaker popped 2.1% after reporting positive results from phase 2 trials for its new osteoporosis drug, odancatib. while Wal-Mart and Home Depot jumped largely on the favorable retail report, both gaining 1.8%.
On the downside, telecoms again fell in response to the deal between Sprint Nextel, the nation's third-leading carrier, and Softbank. Heavyweights AT&T (T +1.26%) and Verizon (VZ +1.43%) dropped 1.2% and 0.3%, respectively.
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