Closing Market Summary: Upbeat Week Ends on Flat NoteThe stock market saw limited movement on Friday, ending a positive week on a flat note. The S&P 500 (unch) settled just above its flat line, locking in a 1.2% gain for the week. The Dow (unch) and Nasdaq (-0.1%) also finished near their flat lines, ending the week with respective gains of 0.9% and 1.4%.
Equities started the day just above yesterday's closing levels, but relative weakness in a handful of rate-sensitive sectors and a mixed showing from other groups kept the market near its unchanged level. The underperformance in groups like utilities (-0.5%), telecom services (-0.4%), and real estate (-0.9%) was owed to overnight and early-morning selling in Treasury futures, which lifted the 10-yr yield to a six-week high just below the 3.000% area.
The broader market treaded water during early trade, thanks to gains in cyclical sectors like financials (+0.7%), industrials (+0.5%), and energy (+0.6%). The S&P 500 was on the verge of climbing to a fresh high around noon, but a Bloomberg report, indicating that President Trump is seeking to impose tariffs on $200 billion worth of imports from China despite the recent efforts to revive trade talks, sent the broader market to a session low.
In addition to pressuring stocks, the news weighed on offshore yuan and helped the U.S. Dollar Index (94.94, +0.42) climb to a fresh high, trimming this week's loss to 0.4%.
Afternoon trade saw a slow climb off session lows, but the S&P 500 was not able to revisit its high, as heavily-weighted groups like consumer discretionary (-0.3%) and health care (-0.3%) struggled. For its part, the top-weighted technology sector spent the session near its flat line, ending little changed.
The market received just two earnings reports between yesterday's closing bell and today's open. Adobe Systems (ADBE 274.69, +6.17) climbed 2.3% to a fresh record after beating earnings and revenue expectations while Dave & Buster's (PLAY 62.05, +4.53) rose 7.9% to a 13-month high after beating quarterly expectations and initiating a quarterly dividend of $0.15 per share.
Treasuries ended the day with losses, though intraday action saw the complex climb off mid-morning lows. The 10-yr yield rose three basis points to 2.99% after approaching its August high (3.02%) in early trade.
Investor participation was fairly consistent with the past two sessions as 762 million shares changed hands at the floor of the New York Stock Exchange.
Participants received a sizable batch of economic data today, including August Retail Sales, August Import/Export Prices, August Industrial Production and Capacity Utilization, July Business Inventories, and the preliminary reading of the University of Michigan Consumer Sentiment Index for September:
- August retail sales rose 0.1% (consensus +0.4%), while the July increase was revised to 0.7% from 0.5%. Excluding autos, retail sales increased 0.3% in August (consensus +0.5%), and the July increase was revised to 0.9% from 0.6%.
- The upward revisions to the prior month helped mitigate some of the headline disappointment for August, yet the key takeaway from the report is that consumer spending is up and will continue to support real GDP growth in the third quarter.
- Import prices declined 0.6% in August after sliding a revised 0.1% in July (from 0.0%). Excluding oil, import prices slid 0.1% in August after slipping an unrevised 0.3% in July.
- The key takeaway from the report is the recognition that nonfuel import prices have declined for three straight months, underscoring perhaps some of the effects of a stronger dollar. The moderation in nonfuel import prices could help temper budding inflation concerns for the time being.
- Industrial Production rose 0.4% in August (consensus +0.4%), while the July increase was revised to 0.4% (from 0.1%). Meanwhile, Capacity Utilization came in at 78.1% (consensus 78.3%), up from a revised reading of 77.9% in July (from 78.1%).
- The key takeaway from the report is the understanding that factory output was unchanged, excluding the gain in motor vehicles and parts.
- Business Inventories rose 0.6% in July (consensus +0.6%). The June reading was left unrevised at +0.1%.
- The key takeaway from the report is that business sales continued to outpace inventory growth year-over-year, which is a favorable trend that carries the potential to lead to a better pricing environment for businesses.
- The preliminary reading of the University of Michigan Consumer Sentiment Index for September rose to 100.8 (consensus 97.0) from 96.2 in August.
- The key takeaway from the report is that the pickup in sentiment was widespread across all major socioeconomic groups, which is a good underpinning for solid consumer spending activity.
Monday's economic data will be limited to the 8:30 ET release of the Empire Manufacturing report for September (consensus 23.0).
- Nasdaq Composite +16.0% YTD
- Russell 2000 +12.2% YTD
- S&P 500 +8.7% YTD
- Dow Jones Industrial Average +5.8% YTD