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Investing Specialists

Shop 'Til You Drop

Consumer spending this holiday season was stronger than most anyone expected.

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The S&P 500 closed roughly flat for the year and the week, as the market capped off a tumultuous 2011 with a 0.4% loss on Friday. This week, the market liked the improved holiday shopping numbers, the housing news, and a relatively mild uptick in initial unemployment claims (though the four-week average continued its multimonth decline to a new recovery low). It largely ignored a fairly significant increase in Italian interest rates that are now back over 7%. Some saber rattling by Iran midweek (rumors of them threatening to block oil shipments through the Strait of Hormuz) was the only thing that gave the market much pause.

Consumers Shopped 'Til They Dropped
The best news of the week is that consumers continued to spend through the holidays. Whatever metric one picks, the performance was better than most anyone expected, despite record warm temperatures in the Midwest and Northeast dampening sales of winter-related products.

Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.