U.S. stock benchmarks gained traction Friday morning, with gains partly attributed to data showing better-than-expected retail sales in September and along with an improvement in consumer sentiment, relieving fears about a slow economic recovery.
Wall Street sentiment was also supported by news of the possibility of a Pfizer vaccine by next month, even as the spread of the viral outbreak has forced some restrictions on business and travel in major European cities.
The Dow Jones Industrial Average (DJIA) were trading 227 points, or 0.8%, higher at 28,735; the S&P 500 index (SPX) was trading about 16 points higher to reach 3,499, a gain of 0.5%; while the Nasdaq Composite Index (COMP) had trimmed its earlier gains, and was now up 17 points, or 0.2%, to reach around 11,731, after hitting a peak at 11,827.42.
On Thursday, the Dow fell 19.80 points, or 0.1%, to 28,494.2, but well off its intraday nadir of 28,181.54; the S&P 500 index finished down 5.33 points to end at 3,483.34, a drop of 0.2%, while the Nasdaq Composite Index slumped by 0.5%, a fall of 54.86 points to 11,713.8.
For the week, the Dow is on track for a 0.8% weekly gain, the S&P 500 is set to rise 1.1%, while the Nasdaq Composite was on pace to advance by 2.1%.
The stock market on Friday was aiming to snap a three-session skid to end a choppy week, with a report on retail sales suggesting consumer spending is more resilient than expected in the midst of the worst pandemic in more than a century.
U.S. retail sales in September rose 1.9%, compared to consensus estimates from economists polled by Dow Jones for 0.7%, underscoring that consumers, the lynchpin of economic health, continue to buy amid the viral outbreak that has hobbled the economy for months.
September’s gain follows a 0.6% rise in August and points to continued improvement in business activity, coming as fears of the viral epidemic picking up steam in the autumn and winter grow.
“Amid a stagnating labor market, the jump in retail sales this month suggests consumer strength is pretty robust—with the highest number we’ve seen in three months,” wrote Mike Loewengart, director investment strategy at E-Trade Financial, in a Friday note.
“The momentum on that front could be a positive for the market as investors look for signs of recovery. That said, it remains to be seen if this is an outlier or trend,” he wrote.
Meanwhile, Pfizer Inc.’s (PFE) announcement that it could have a late-stage experimental coronavirus vaccine ready for emergency-use authorization by late November—if it proves successful in trials—provided another lift to markets that have been dogged this week by reports of the spread of the viral pandemic outside and inside the U.S.
More than half-a-dozen states, including Ohio and Michigan, reported record numbers of new coronavirus cases Thursday, pushing the U.S.’s single-day total above 60,000 for the first time in over two months, the Wall Street Journal reported.
Equity indexes in the U.S. are attempting to avoid a third straight decline as investors contend with spiking cases of the deadly disease that has infected nearly 40 million people globally, as well as concerns about a lack of additional coronavirus relief aid to help the economy navigate the public-health crisis.
On Wednesday, House Speaker Nancy Pelosi said that she wouldn’t wait until the end of the year to strike an agreement on fiscal stimulus for out-of-work Americans and troubled businesses, which may have provided some modest grist for bulls in the waning hours of the session’s trade. White House and Democratic negotiators also agreed Thursday to include a national coronavirus-testing strategy in relief legislation.
Still, Senate approval for any large-scale stimulus seems unlikely, even as President Donald Trump pushed Senate Majority Leader Mitch McConnell to “go higher“ and push forward a more expansive package than the White House’s current $1.8 trillion offer.
Market participants were also assessing dueling townhalls meetings held Thursday evening by President Donald Trump in Florida and Democratic challenger and former Vice President Joe Biden in Philadelphia, where the presidential contenders for the next four years discussed coronavirus and their tax plans among other issues.
In other economic reports, a reading on U.S. industrial production came in weaker than expected, dropping 0.6% in September, compared against an expected increase based on average economist estimates for a rise of 0.5%.
Some took that as as sign of weakness in the economy despite the strong retail sales report. “Industrial output came in well below expectations, one of the first real signs that the recovery is losing momentum under the weight of the ongoing health crisis and fading support from fiscal relief,” wrote economists at Oxford Economics in a Friday report after the data.
Meanwhile, a preliminary reading of consumer sentiment index edged up to 81.2 this month from a revised 80.4 in September, the University of Michigan said Friday.
The yield on the 10-year Treasury note (BX:TMUBMUSD10Y) was up around a single basis point to 0.74%. Yields and bond prices move in opposite directions.
Gold prices (GCZ0) traded slightly higher, up 0.1% at $1,911.70 an ounce. Oil futures were falling, pushing the U.S. benchmark (CRUD) down 1.3% to trade at $40.68 a barrel on the New York Mercantile Exchange.
The greenback was 0.2% lower on Friday, based on the ICE U.S. Dollar Index (DXY) but was on track for a weekly gain of 0.7%.