Wall Street ends wild week with modest gains

NEW YORK?? A strong report on retail sales in July sent U.S. stock prices higher Friday after a chaotic week of record-setting gains and losses on Wall Street.

The government said that consumers spent more on autos, furniture and gasoline in July, pushing up retail sales by the largest amount in four months. The gain signals that Americans are a little more confident, and helps to dispel fears that the economy could tip back into recession.

The retail sales news pushed the Dow Jones industrial average up about 125 points at the closing bell. A disappointing report on U.S. consumer sentiment, released after the open, briefly took the wind out of the early rally, but the market had lately resumed its rise.

Story: Consumer sentiment plunges on gloom over politics

Retail sales rose 0.5 percent last month, the best showing since a 0.8 percent advance in March, the Commerce Department said. It revised sales higher in the previous two months.

The news offered some direction for traders dizzy after the market's gyrations this week. Shares have been swinging by hundreds of points each day as traders react with hair triggers to news about the economy, Federal Reserve policy and a financial crisis in Europe that threatens to spill over into U.S. banks.

High-speed trading by computers has contributed to the volatility, as shares hit high and low levels at which machines are programmed to buy or sell large numbers of shares.

Markets in Europe advanced on Friday and bank stocks recovered some of this week's losses. Regulators of major European exchanges banned the short-selling of financial company shares, protecting them from downward pressure by speculators. Asian markets closed mixed.

France's benchmark index, the CAC-40, rose 2.1 percent despite news that the nation's economy hit the brakes in the second quarter as exporters' wares piled up and consumers held onto their money.

Story: French economic growth sputters to halt

Concerns about the French economy stoked fears about the crisis in the eurozone, where France has the second-largest economy after Germany's. As their heavily indebted neighbors struggle to stay afloat financially, the region's economic powers must shoulder most of the costs of rescuing Greece, Portugal and Ireland from defaulting on their debts. A default would increase borrowing costs and hurt the regional currency.

If France's economy falters or if it loses its AAA credit rating, the nations might have trouble raising the money that they need to pay for future bailouts. Worries about debt issued by Italy and Spain, and the stability of banks there, have prompted the European Central Bank to buy their sovereign bonds to lower their borrowing costs.

Italy and Spain have Europe's third- and fourth-largest economies. The current bailout programs probably would be too small to rescue them from a potential default.

Most other major European markets rose by more than 2 percent.

The gains followed a winning day on Wall Street that would have ranked as a stunning rally during any normal trading week.

The Dow Jones industrial average soared 423 points on Thursday. It had already fallen 634 points Monday, risen 429 Tuesday and fallen 519 Wednesday. Never before has the Dow had four 400-point swings in a row.

The stock market began its long skid downward three weeks ago, on July 22.

The Associated Press and Reuters contributed to this report.

Source: http://www.msnbc.msn.com/id/44117715/ns/business-stocks_and_economy/

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