Tamsyn Vohradsky, center, holds up her iPhone 5 after becoming one of the first buyers of Apple's new iPhone 5 from their flagship store in Sydney on Friday.
Today: Apple's (AAPL) influence on the economy showed up as September's retail sales increased more than expected thanks to iPhone 5 sales. Also: Wall Street reacts positively to economic news, Yahoo (YHOO) looks to Google (GOOG) for another executive.
Apple sales help boost retail numbers for month of September
Apple's outsize presence on Wall Street has been well-chronicled, as the movement of shares in the most valuable U.S. company can sway two of the three major indexes on Wall Street. Monday's federal retail sales report reminded onlookers that the Cupertino company's performance could have just as large an effect on the entire U.S. economy.
The Commerce Department reported Monday that retail sales grew by 1.1 percent in September, easily outpacing economists' prediction of growth of 0.7 percent to 0.9 percent. the push was driven by a 4.5 percent increase
in sales at electronics retailers, gains that economists attributed to the late-September release of Apple's newest smartphone."Although we don't get a breakdown of the data by specific electronic goods, the jump in sales is probably due to the September 21 release of the iPhone 5," BNP Paribas economist Jeremy Lawson wrote in a report.
Apple sold 5 million iPhone 5 units in the first three days of availability, a record weekend that many experts expected to be even better. The company has reportedly had issues producing enough smartphones to satisfy the huge demand.
A boost in retail sales after the launch of a new iPhone is nothing new, nor truly unexpected: The Wall Street Journal's Spencer Jakab predicted that retail sales would beat expectations thanks to a new iPhone, pointing out that retail sales were high after previous iterations of the popular smartphone hit the market.
In fact, experts expect an economic boost in the U.S. from Apple beyond just retail sales. The Federal Reserve reported that air cargo companies received a boost from flying the precious devices across the globe, and J.P. Morgan chief economist Michael Feroli predicted in September that the iPhone 5 would boost fourth-quarter growth in U.S. gross domestic product by an annualized quarter-to-half percentage point.
"Calculated using the so-called retail control method, sales of iPhone 5 could boost annualized GDP growth by $3.2 billion, or $12.8 billion at an annual rate," Feroli wrote.
Of course, the iPhone was not the only driver for increased consumer spending in September -- an analysis by Millan Mulraine of TD Securities showed that growth would have still been about 0.7 percent with it. Not all the other growth was positive, as Americans spent more on necessities like gas and food, worrisome signs of inflation.
However, most economists believed the end result provided strong momentum for the economy.
"The improvement in spending was more than an iPhone 5 sugar high," Mulraine told the Journal. "Overall, this was a very strong report and the buoyancy in household spending is consistent with the improving tone seen in consumer confidence in recent months."
Apple stock, struggling since the opening weekend of iPhone sales failed to match analysts' forecasts, increased 0.8 percent to $634.76.
Stocks gain on retail news, Dow has best day in a month
The good economic news pushed stocks to a positive day, as the Dow Jones had its biggest increase in a month thanks to growth from retailers and banks.
While retailers' stocks benefited nearly across the board -- for instance, Pleasanton-based Ross increased 0.9 percent and San Francisco's The Gap grew 0.5 percent -- banks received a bigger boost from strong earnings from Citigroup. Citigroup increased 5.5 percent, Goldman Sachs grew 3.6 percent and Bank of America moved up 3.5 percent.
In Silicon Valley, Intel (INTC) increased 1.2 percent one day ahead of its earnings report, which arrives as doom and gloom settles over the personal computer industry. PC companies also managed gains, with Hewlett-Packard (HPQ) advancing 0.4 percent and Microsoft increasing 1.1 percent as it announced a new streaming music service. Microsoft's announcement was not a boon for Oakland's Pandora online radio service, which dropped 3.1 percent Monday.
Workday, the Pleasanton cloud software company that debuted on Wall Street with an incredible pop Friday, kept moving higher Monday, closing with a 6.7 percent gain at $51.94 after selling IPO stock at $28. Other stocks that recently went public moved h higher as well, with Splunk gaining 2.9 percent and Palo Alto Networks increasing 4.1 percent.
Overall, all three major U.S. indexes gained between 0.6 percent and 0.8 percent Monday, while the SV150 index of Silicon Valley largest tech companies grew by 0.6 percent.
Yahoo CEO Marissa Mayer looks to former employer for COO
Yahoo CEO Marissa Mayer's vision for Yahoo apparently includes enough Googlers to change the name to Yahoogle: The former Google executive poached a new chief operating officer from her former company Monday, hiring the man who helped Google overtake Yahoo in display advertising.
Senior Google advertising executive Henrique de Castro received a large pay package to join Mayer at Yahoo -- he will be eligible for stock and options valued at $56 million, in addition to a $600,000 annual salary, a potential bonus of $540,000 and a $1 million cash bonus, according to a regulatory filing. De Castro, 47, has been at Google since 2006 and Mayer described him as "an incredibly accomplished and rigorous business leader" in Monday's new release.
Another former Google exec -- Michael Barrett -- signed on to come to Yahoo in the revenue field under interim CEO Ross Levinsohn, whom Mayer replaced. The two would work closely together, though AllThingsD reporter Kara Swisher said Monday that they did not get along well while in Mountain View.
Monday was Mayer's first day back in the office since giving birth to her first child about two weeks ago, and she made a big splash after the bell with the announced hire. While Yahoo fell 1.3 percent to $15.68 in regular trading, it bounced back by 0.5 percent in after-hours trading.
Silicon Valley tech stocks
Up: Workday, Palo Alto Networks, Splunk, Juniper, Electronic Arts (ERTS), Nvidia, Adobe (ADBE), Intel, Oracle (ORCL), NetApp, Apple, Cisco (CSCO), VMware
Down: Jive, Yahoo, Tesla, eBay (EBAY), Gilead, Google, Zynga
The tech-heavy Nasdaq composite index: Up 20.07, or 0.66 percent, to 3,064.18
The blue chip Dow Jones industrial average: Up 95.38, or 0.72 percent, to 13,424.23
And the widely watched Standard & Poor's 500 index: Up 11.54, or 0.81 percent, to 1,440.13
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.
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