Not surprisingly, Americans spent much less on gifts this season than they did last year, according to SpendingPulse, a division of MasterCard Advisors. Retail sales dropped between 5.5 percent and 8 percent compared with last year, the data showed, or between 2 percent and 4 percent after stripping out auto and gas sales.
Personal consumption is a huge part of U.S. economic activity — comprising more than two-thirds of gross domestic product — so Wall Street is nervous that a more frugal consumer could keep the economy weak in 2009.
Investors did get a some good news on Christmas Eve, when the Federal Reserve allowed GMAC Financial Services — the finance arm of struggling Detroit automaker General Motors Corp. — to become a bank holding company and thus qualify for the government's $700 billion rescue fund. Analysts had said that without financial help, GMAC might have had to file for bankruptcy protection or shut down.
But so far, with just four trading days left in the year, no news has been upbeat enough to spark a year-end rally on Wall Street. December is usually a strong month for the stock market, with a flurry of trading known as a "Santa Claus rally" often seen in the month's final week.
In early trading, the Dow Jones industrial average rose 40.54, or 0.48 percent, to 8,509.02.
Broader stock indicators also advanced. The Standard & Poor's 500 index rose 4.18, or 0.48 percent, to 872.33, and the Nasdaq composite index rose 3.98, or 0.26 percent, to 1,528.88.
Trading volumes are expected to be extremely low on Friday as they were earlier this week. When trading is light, stock movements are often not indicative of broader market sentiment. Friday is also likely to be a quiet day of trading because there are no major economic or corporate reports scheduled.