US STOCKS-Market gains on surprise rise in retail sales

(Updates to midmorning)

By Kristina Cooke

NEW YORK, Feb 13 (Reuters) - U.S. stocks rose on Wednesday after government data showing an unexpected rise in retail sales last month suggested consumer spending would hold up and help the economy avert a recession.

Stronger-than-expected earnings from Applied Materials (AMAT.O: Quote, Profile, Research) gave a boost to technology shares. Shares of the biggest producer of chip-making equipment rose 6.8 percent.

The surprise rise in overall retail sales bucked expectations for monthly cash register receipts to show their first back-to-back drop in 4 1/2 years. For details, see [ID:nN13334844].

Industrial companies, which are particularly sensitive to economic growth, supplied the top boost to the Dow. 3M (MMM.N: Quote, Profile, Research) rose 1 percent to $79.96.

"Retail sales were a good surprise and indicate there are still some pockets of consumers who are still spending. We all know the economy is slowing, so any signs we are not in total disarray are welcomed," said Jordan Posner, senior portfolio manager at Matrix Asset Advisors in New York.

"Also, corporate earnings to a large degree have been OK, and we haven't had any more bad news out of the financial sector. It's those three layers that are supporting the market today."

The Dow Jones industrial average .DJI was up 78.77 points, or 0.64 percent, at 12,452.18. The Standard & Poor's 500 Index .SPX was up 7.91 points, or 0.59 percent, at 1,356.77. The Nasdaq Composite Index .IXIC was up 22.08 points, or 0.95 percent, at 2,342.12.