July 11, 2020

Wall Street Weakens

Wall Street opened weakly on Friday, pulling back from record levels, after reports showed an unexpected drop in retail sales and unimpressive earnings from major banks.

The Standard Poor’s 500-stock index lost 0.2 percent in morning trading, the Dow Jones industrial average fell 0.1 percent and the Nasdaq composite index dropped 0.1 percent.

Data showed retail sales fell 0.4 percent in March, while February’s strong gain was revised down slightly. Consumer spending plays a key role in the American economy, accounting for two-thirds of activity.

Investors have been watching indications that economic growth could be softening, particularly after last week’s disappointing jobs number, but they have not derailed the market rally so far.

“It shows that the economy continues to weaken and consumers are cautious,” Peter Cardillo, chief market economist at Rockwell Global Capital in New York, said about the retail numbers.

The advance in equities in recent months has been partly because of the Federal Reserve’s economic stimulus efforts, and analysts are viewing the first-quarter earnings season as a test for whether those gains are justified by corporate performance.

“I haven’t seen good enough news to warrant this huge rise in the market,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

JPMorgan Chase reported higher first-quarter profit, though revenue declined. Its stock was 0.2 percent lower. Wells Fargo was also lower, falling 0.8 percent. The bank’s profit was better than expected, but it made fewer home loans.

Earnings for S.P. 500 companies are expected to grow at a modest 1.2 percent in the first quarter, according to Thomson Reuters data.

Analysts said concerns over the euro zone debt crisis set a negative tone in the market Friday, with European Union finance ministers meeting during the day and Saturday and Cyprus’s bailout expected to be discussed. Euro zone stock markets were down more than 1 percent, while the FTSE 100 in London was off only 0.4 percent, in afternoon trading.

Article source: http://www.nytimes.com/2013/04/13/business/economy/daily-stock-market-activity.html?partner=rss&emc=rss

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