U.S. stocks struggled for direction Thursday, trading near unchanged after earlier declining in the wake of weak retail sales numbers and rising jobless claims that had punctured optimism over U.S.-China trade talks and a new deal to avoid a government shutdown.
How are equity markets faring?
The Dow Jones Industrial Average DJIA, -0.13% trimmed losses to fall 39 points, or 0.2%, at 25,503, while the S&P 500 index SPX, -0.01% edged up less than a point to 2,753. The Nasdaq Composite Index COMP, +0.31% gained 22 points, or 0.3%, to 7,442.
At session lows, the Dow had dropped as many as 235 points, the S&P had shed 22 points and the Nasdaq was 45 points off.
What’s driving the market?
Investors were caught by surprise by a report showing that U.S. retail sales fell by 1.2% in December, the largest single month decline since 2009 and well below the flat growth expected by economists polled by MarketWatch.
Stock-index futures had been on the rise before the release of those numbers, along with jobless claims data that showed more Americans than expected applying for unemployment benefits.
The poor retail data canceled out positive impact of apparent progress in trade discussions with high-level talks between China and the U.S. under way amid reports indicating that President Donald Trump may extend the tariff truce with Beijing by another 60 days if a trade deal appears near, Bloomberg News reported.
Trump has described talks, among the biggest concerns for market participants, as going “very well.” However, some observers are expecting only a limited trade deal to come to fruition, particularly if a March deadline isn’t extended.
Meanwhile, Trump was set to sign border-security legislation, which would avert a partial government shutdown.
Earlier, reports on Japanese gross domestic product matched market expectations, while Chinese exports and imports were better than expected, as German growth numbers stagnated, painting a mixed picture of the state of the international economy.
The number of Americans applying for first-time unemployment benefits for the week ended Feb. 9 rose by 4,000 to 239,000, compared with the week previous, the Labor Department said. Economists polled by MarketWatch predicted jobless claims would come in lower, at 225,000.
The U.S. producer-price index fell by 0.1% in January, lower than the 0.1% increase expected by economist polled by MarketWatch.
Business inventories dropped 0.1% in November, according to a report delayed by the partial government shutdown.
What are strategists saying?
“There’s no denying the retail sales number was no good and rotten,” Steve Chiavarone, portfolio manager with Federated Investors, told MarketWatch. But one number is not enough to sour on the health of the U.S. consumer, he added.
“When you think about the low unemployment rate, that unemployment claims are still low and that incomes are growing, there’s not much other evidence that the consumer is unhealthy,” Chiavaronne said.
See: The Nasdaq is about to exit from bear-market territory
Which stocks are in focus?
Coca-Cola Co. KO, -7.59% shares fell 7.6% after the beverage giant reported results that showed the company falling short of fourth-quarter revenue expectations. The stock was down 7%.
Shares of Cisco Systems Inc. CSCO, +3.18% rose 3% after earnings and the network giant’s outlook topped Wall Street expectations.
Shares of NetApp Inc. NTAP, -7.20% slid 5.5% after the cloud data services company issued a fiscal third-quarter earnings report that showed it falling short of revenue expectations.
Bloomin’ Brands Inc. BLMN, +8.85% shares jumped 9.4% after the parent company of Outback Steakhouse reported fourth-quarter profits and sales that surpassed Wall Street expectations.
CenturyLink Inc. CTL, -10.17% shares sank 9.9% after the integrated communications firm reported earnings that fell short of analysts’ revenue expectations.
Shares of Avon Products Inc. AVP, -9.48% skidded 9.3% after the beauty products company reported fourth-quarter results.
Shares of Six Flags Entertainment Corp. SIX, -12.29% tumbled 13% after the firm reported weaker-than-expected fourth quarter earnings.
Read: Morgan Stanley warns of a looming earnings recession
How are other markets trading?
Asia stocks closed mostly lower, with Hong Kong’s Hang Seng Index HSI, -0.23% China’s Shanghai Composite Index SHCOMP, -0.05% slipping, while the Nikkei NIK, -0.02% ended the day virtually unchanged.
European stocks were declining with the Stoxx Europe 600 SXXP, -0.32% losing ground.
Crude-oil futures CLH9, +0.85% gained and gold GCH9, +0.00% was in retreat. The U.S. dollar DXY, -0.16% meanwhile, fell relative to its peers.
—Mark DeCambre contributed to this report
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