Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Wall Street Opens Higher on Retail Sales Cheer; Dow up 160 Points

Published 10/16/2020, 09:09 AM
Updated 10/16/2020, 09:45 AM
© Reuters.

© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. stock markets opened higher on Friday, lifted by a much stronger-than-expected report for retail sales in September that reassured market participants that consumer spending, the motor of the economy, is still holding up despite sustained high levels of layoffs and unemployment.

By 9:40 AM ET (1340 GMT), the Dow Jones Industrial Average was up 160 points, or 0.6%, at 28,654 points. The S&P 500 was up 0.4% and the Nasdaq Composite was up 0.6%.

Earlier, the Commerce Department said that core retail rales rose by 1.5% in September from August, three times the 0.5% increase forecast ahead of time. The numbers outweighed a less positive update from U.S. factories industrial production fell by 0.6% in the month, rather than the 0.5% increase expected. While much of that was due to a bigger-than-usual drop in utility output of power as summer demand for air-conditioning tapered off, capacity utilization and manufacturing output also dropped.

However, analysts at ING noted that the retail sales numbers, too, may have been distorted, in as much as August's numbers didn't have the usual 'back to school' surge in clothing and department store expenditures. The pandemic this year has disrupted the seasonal patterns behind many high-frequency economic indicators, closing down factories that would normally be open and forcing consumers to change the way they spend  their money and when they spend it.

"There is clearly momentum behind spending," ING's chief international economist James Knightley said in a note to clients, with a nod to the sustained strength of personal income thanks to extensive government support for the newly-unemployed. "However," he added, "uncertainty about Covid-19, particularly the fear that European-style containment measures could eventually return to parts of the US, may mean fewer upside surprises in coming months."

Bank stocks remained under pressure at the end of a week when all the big lenders reported figures that showed significant pressure on their earnings from the collapse in U.S. interest rates.  JPMorgan (NYSE:JPM), Citigroup (NYSE:C), Wells Fargo (NYSE:WFC) and Bank of America (NYSE:BAC) all fell by between 0.5% and 1%. 

More positively, Hertz Global  (NYSE:HTZ) stock more than doubled after the bankrupt car rental company said it had agreed $1.7 billion in debtor-in-possession funding that could pave the way for it to leave Chapter 11. Meanwhile, Navistar (NYSE:NAV) stock rose over 20% on reports that Volkswagen (DE:VOWG_p)'s truck unit Traton is close to completing the buyout of minority shareholders .

Pfizer  (NYSE:PFE) stock rose 2.2% after the pharma giant said it expects to apply for emergency use authorization for its experimental Covid-19 drug in the third week of November. Shares in its project partner Biontech (NASDAQ:BNTX), which are usually more sensitive to such news, rose 2.9% to a two-month high. The Pfizer/Biontech drug is one of the few big hopes for a Covid-19 treatment that hasn't yet run into trouble during its clinical trials. Eli Lilly (NYSE:LLY) and Johnson & Johnson both had to suspend their trials this week after unexplained illnesses among study participants.

 

Latest comments

Back to school push more buy from mom n pop.
Continued fake news by trump government
good new
Recession cancelled
afterall stimulus package is not over
Postponed
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.