Traders Head out Early Friday
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Traders Head out Early Friday
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Home Page > Finance > Day Trading > Traders Head out Early Friday
Traders Head out Early Friday
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Posted: Aug 14, 2010 |Comments: 0
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Stocks fluctuated Friday after a mixed batch of readings on consumer spending contributed to a muddled picture of the economy. The major stock indexes moved in a narrow band, alternately rising and falling in very light trading. Many traders were away on vacation, and those who were working had little reason to make any major moves because of economic data that remains confusing.
The Commerce Department said that retail sales rose 0.4 percent in July. That was an improvement after two months of sales declines. But the number was just below economists’ forecast of a gain of 0.5 percent. The report did show strength in auto sales, but it also showed that consumers are shying away from other purchases.
Some better news came from the University of Michigan/Reuters survey of consumer sentiment for the first part of August, which showed consumers are slightly more optimistic. An index based on the survey came in at 69.6, slightly above analysts’ estimates and up from July’s 67.8.
Earlier Friday, retailer J.C. Penney Co. lowered its earnings forecast for the year, citing expectations that consumer spending will be slow. J.C. Penney joined competitor Kohl’s Corp., which lowered its earnings outlook on Thursday.
These latest reports fell in line with a long string of conflicting data that has left investors unsure about where the economy is headed. Consumer spending has remained weak along with the labor market. And there are no signs that employers are ready to start hiring at a pace to help lift the economy. On Thursday, the Labor Department said the number of people filing for unemployment benefits for the first time rose last week.
Although J.C. Penney and Kohl’s had disappointments for investors, second-quarter earnings overall have been strong and company executives are optimistic. The split between economic and earnings numbers has added to investors’ murky view of the economy.
That uncertainty has led to heavy selling this week. The Dow Jones industrial average has lost 380 points over the past three days. But the big drop may also have lured some buyers back into the market Friday.
“Maybe it’s getting ready to be bought again,” Philip S. Dow, director of equity strategy at RBC Wealth Management in Minneapolis, said of the market. He noted that the market’s recent declines have made stocks more attractive.
Still, that doesn’t mean analysts are looking for the market to rally.
“We’re in a fragile market,” said Steven Goldman, chief market strategist, Weeden & Co. in Greenwich, Conn. He noted that the market’s decline is feeding the lack of confidence among consumers and investors. That inevitably has an impact on the economy.
The Dow Jones industrial average was up 22.29, or 0.2 percent, at 10,342.32. The Standard & Poor’s 500 index rose 0.43, or 0.04 percent, to 1,084.04. The Nasdaq composite index fell 4.28, or 0.2 percent, to 2,185.99.
Rising stocks were ahead of losers by 4 to 3 on the New York Stock Exchange, where volume came to a light 445 million shares.
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WorldMarketMedia.com (The Global Online Investment Community) is a high traffic stock market, news data website providing cutting edge new media products and services to publicly traded companies worldwide. Our Editor’s Desk authors insightful real-time coverage on the economy, the capital markets and their listed companies.
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