S&P 500 and Nasdaq Jump Ahead After Investors Overlook Weak Retail Sales

Barry Adams
18 Jul, 2023
New York City

Stocks lacked direction in early trading as investors reviewed a fresh batch of corporate earnings and retail sales data. 

Retail sales, not adjusted for inflation, rose in June, but increased less than expected. 

Consumer spending has been resilient despite prices staying higher than pre-Covid level. 

On the earnings front, Morgan Stanley reported better-than-expected earnings but lower than a year ago, Bank of America advanced after reporting better-than-expected revenue and earnings and Lockheed Martin after quarterly results were ahead of expectations. 

 

June Retail Sales Jumped 0.2% 

U.S. retail sales rose 0.2% in June following an upwardly revised 0.5% increase in May, the U.S. Census Bureau reported Tuesday. 

Retail sales data are not adjusted for inflation and consumer spending continues to remain resilient in the face of inflation falling to a two-year low. 

Core retail sales, which excludes automobiles, gasoline, food services and building materials rose 0.6%. 

Furniture sales rose 1.4%, electronic appliance sales increased 1.1% and sales at non-store retailers and miscellaneous stores jumped 1.9% and 2.0% respectively. 

Apparel store sales increased 0.6% and motor vehicle parts sales inched higher 0.3%. 

However, gasoline station sales declined 1..1%, building materials and garden equipment sales fell 1.2%, food and beverage store sales decreased 0.7% and sports, music and book store sales eased 1.0%. 

 

U.S. Indexes & Yields 

The S&P 500 index traded higher 0.1% to 4,521.87 and the Nasdaq Composite futures edged up 0.9% to 14,232.68.

The yield on 2-year Treasury notes decreased to 4.71%, 10-year Treasury notes inched lower to 3.78% and 30-year Treasury bonds edged down to 3.91%. 

Crude oil decreased $0.27 to $74.41 a barrel and natural gas prices increased 8 cents to $2.59 a thermal unit. 

 

Stock Movers 

Morgan Stanley gained 3% to $88.88 after the financial services provider reported a smaller-than-expected decline in earnings in its latest quarter. 

The company increased its quarterly dividend by 7.5% to 85 cents a common share. payable to shareholders on record on July 31 on August 15. 

Bank of America jumped 2.5% to $30.01 after the bank reported better-than-expected revenue and earnings in its latest quarter results. 

PNC Financial Services declined 0.6% to $126.25 after the regional bank reported lower-than-expected revenue in its latest quarter. 

The bank lowered its annual net interest income increase range between 5% and 6% from the previous range between 6% and 8%.