An early rally fizzled out Friday, but the S&P 500 and Dow still closed higher as markets recovered some of the last three days’ worth of losses.
During the session, investors eyed a slate of upbeat announcements from major companies, including Boeing and Pfizer, and a much better than expected print on spending by the U.S. consumer.
U.S. retail sales jumped 1.9% in September from August, blowing past estimates for a 0.8% gain, according to Bloomberg data. Spending at clothing stores surged 11% during the month, but held below levels from September last year. Sales at department stores, auto dealers and sporting goods stores also contributed to retail sales’ fifth straight monthly gain.
The upside surprise on consumer spending – the biggest contributor to U.S. economic activity – helped offset concerns about the pace of recovery in the manufacturing sector. U.S. industrial production unexpectedly dropped for the first time in five months in September, new Federal Reserve data showed.
Meanwhile, shares of Dow-component Boeing (BA) jumped more than 2.5% after Europe’s top aviation regulations agency EASA suggested that the 737 Max will be safe to fly again in the region before the end of the calendar year, according to a Bloomberg interview with the director of the agency. The 737 Max has been grounded globally since March 2019 following two deadly crashes.
Pfizer (PFE), meanwhile, said in an update Friday that it expected to reach a key milestone in its COVID-19 vaccine candidate testing in the third week of November, after which it planned to apply for Emergency Authorization Use through the U.S. Food and Drug Administration. Investors cheered the news by sending the stock more than 1% higher.
The positive company news helped disperse some of the gloom around fast-fading prospects for fiscal stimulus out of Washington Senate Majority Leader Mitch McConnell broke with the White House and said he was going to have the chamber next week take up a proposal worth about $500 billion – or less than a quarter the size of the proposal House Democrats advanced earlier this month.
President Donald Trump, for his part, suggested in a Fox Business interview he was willing to go higher than the $1.8 trillion package he last put forward. Still, however, ongoing discussions between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have produced little tangible progress in narrowing the differences between D.C.’s warring factions.
4:00 p.m. ET: Stocks end mixed as rally fades
Here were the main moves in equity markets, as of 4:00 p.m. ET:
S&P 500 (^GSPC): +0.57 points (+0.02%) to 3,483.91
Dow (^DJI): +112.57 points (+0.4%) to 28,606.77
Nasdaq (^IXIC): -42.31 points (-0.36%) to 11,671.56
2:39 p.m. ET: Stocks maintain gains intraday, Dow adds 250+ points
The three major indices held higher in intraday trading Friday, driven by a jump in the health-care, utilities and industrial sectors in the S&P 500. Shares of Caterpillar and Boeing outperformed in the Dow.
With less than 90 minutes left to go in the trading day, the S&P 500 gained more than 0.6%. The Dow added nearly 1%, or 270 points, and the Nasdaq increased 0.41%, or 48 points.
10:05 a.m. ET: Consumer sentiment improves slightly in October while remaining below pre-virus levels: U. Michigan
The University of Michigan’s closely watched consumer sentiment index showed a modest increase in October from September, albeit while holding well below pre-pandemic levels.
The headline index ticked up to 81.2 in October, according to the preliminary monthly reading, after rising to 80.4 in September. And while the subindex tracking consumers’ expectations for the future improved to 78.8 from 75.6, an index tracking consumers’ assessments of current conditions slid to 84.9, from 87.8.
The consumer sentiment index had been at 101.0 in February before the pandemic.
“Slowing employment growth, the resurgence in COVID-19 infections, and the absence of additional federal relief payments prompted consumers to become more concerned about the current economic conditions,” Richard Curtin, Surveys of Consumers chief economist, said in a statement. “Those concerns were largely offset by continued small gains in economic prospects for the year ahead.’
9:32 a.m. ET: Stocks open higher after retail sales top expectations
Here were the main moves in markets, as of 9:32 a.m. ET:
S&P 500 (^GSPC): +13.74 points (+0.39%) to 3,497.08
Dow (^DJI): +161.03 points (+0.57%) to 28,655.23
Nasdaq (^IXIC): +47.53 points (+0.41%) to 11,762.70
Crude (CL=F): -$0.53 (-1.29%) to $40.43 a barrel
Gold (GC=F): +$1.80 (+0.09%) to $1,910.70 per ounce
10-year Treasury (^TNX): -0.2 bps to yield 0.732%
8:35 a.m. ET: Industrial production unexpectedly declines in September for the first time in 5 months
U.S. industrial production declined by 0.6% in September to end a four-month winning streak, according to Federal Reserve data on Friday. The drop left production at U.S. factories more than 7% below its pre-pandemic levels from February.
Capacity utilization – which measures the proportion of plants, mines and utilities in use during a period – fell to 70.5% in September for a print more than 5 percentage points below February’s levels before widespread business and factory shutdowns took place. Utilization was at 72.0% in August.
8:30 a.m. ET: Retail sales rise far more than expected in September
Sales at U.S. retailers accelerated far more than expected in September, driven by a rebound in sales at clothing stores.
Headline retail sales rose 1.9% in September from August after a 0.6% gain in the prior month, the Commerce Department said Friday. Consensus economists had been looking for a rise of 0.8%, according to Bloomberg consensus data.
Excluding auto and gas sales, retail sales still jumped 1.5%, or three times the 0.5% rise expected. The gain was driven by an 11.0% jump in sales at clothing and clothing accessory stores, which had lagged earlier on during the pandemic. Department store sales also jumped 9.7% in September, and sporting goods and hobby store sales rose 5.7%.
The only major category to post declines in September was electronics and appliance stores, with sales falling 1.6%.
7:24 a.m. ET Friday: Stock futures point higher after upbeat Boeing, Pfizer news
Here were the main moves in markets, as of 7:24 a.m. ET:
S&P 500 futures (ES=F): 3,479.25, up 3.75 points or 0.11%
Dow futures (YM=F): 28,430.00, up 44 points or 0.16%
Nasdaq futures (NQ=F): 11,894.75, up 20.75 points or 0.17%
Crude (CL=F): -$0.46 (-1.12%) to $40.50 a barrel
Gold (GC=F): +$3.70 (+0.19%) to $1,912.60 per ounce
10-year Treasury (^TNX): -0.7 bps to yield 0.727%
6:09 p.m. ET Thursday: Stock futures open slightly higher
Here were the main moves in equity markets, as of 6:09 p.m. ET:
S&P 500 futures (ES=F): 3,478.00, up 2.5 points or 0.07%
Dow futures (YM=F): 28,401.00, up 15 points or 0.05%
Nasdaq futures (NQ=F): 11,896.25, up 22.25 points or 0.19%