UPDATE: S&P 500 and Nasdaq end at records to end week, amid signs of soft retail sales, coronavirus spread
By Andrea Riquier and Joy Wiltermuth
Retail sales gains were muted in January and industrial production declined but consumer confidence was near a 15-year high in early February
The Nasdaq and S&P 500 finished at records Friday, after bouncing between small gains and losses, as investors parsed mixed data on the strength of the U.S. consumer and monitored the spread of COVID-19 in China.
The bond and stock markets will be closed Monday (http://www.marketwatch.com/story/heres-which-markets-are-open-on-presidents-day-2020-02-14) in observance of Presidents Day.
How did major indexes fare?
The Dow Jones Industrial Average shed 25.23 points, or nearly 0.1%, to end at 29,398.08, while the S&P 500 gained 6.22 points, or 0.2%, to finish at an all-time high close at 3,380.16. The Nasdaq Composite Index added 19.21 points, or 0.2%, to close at a record 9,731.18.
For the week, the Dow advanced 1%, the S&P 500 1.6%, and the Nasdaq 2.2%.
What drove the market?
Despite the fresh all-time highs, some cracks emerged in what has been a seemingly impregnable segment of the U.S. economy: the U.S. consumer. Seeds of doubt were sown on Friday after a report on January retail sales showed sluggish activity (), underscored by a 3.1% drop in sales at clothing stores.
Retail sales rose 0.3% in January (http://www.marketwatch.com/story/sales-at-us-retailers-get-off-to-a-sluggish-start-in-2020-2020-02-14), the government said, matching the MarketWatch consensus forecast.
"The market's resilience in the past couple of years has been predicated on the belief that the consumer will continue to do well--although retail data has been mixed in that regard," said John Carey, director of equity income for the U.S. at Amundi Pioneer, in an interview with MarketWatch.
The weaker-than-expected report on retail sales comes even as a separate measure of consumer sentiment surged above expectations to touch a near 15-year high (http://www.marketwatch.com/story/feeling-good-consumer-sentiment-climbs-in-february-and-returns-near-15-year-high-2020-02-14) in a preliminary February reading.
"It's something that could undermine the market as we move forward, if the consumer pulls back," Carey said, adding that capital spending by companies has been sluggish, while data on car and home sales also have shown signs of having reaching a plateau.
In other data, import prices rose 0.2% (http://www.marketwatch.com/story/us-import-prices-flat-in-january-due-to-lower-fuel-costs-2020-02-14) during the month, according to a separate government report, and have gained 0.3% in the past 12 months. Meanwhile, industrial production marked its fourth decline in five months in January (http://www.marketwatch.com/story/industrial-output-slumps-in-january-for-fourth-decline-in-past-five-months-2020-02-14), the Federal Reserve said falling 0.3%, in line with Wall Street expectations. Separately, the Commerce Department said business inventories rose (http://www.marketwatch.com/story/us-business-inventories-inch-up-01-in-december-2020-02-14) a scant 0.1% in December.
"We have a consumer who is employed and wages are rising marginally," Charlie Ripley, senior investment strategist for Allianz Investment Management told MarketWatch. "I think that's a good backdrop for consumption at this point."
But Ripley also said investors were being cautious ahead of the longer holiday weekend. "That's had marginal pressure on stocks today," he added.
Some of that concern has been wrought by the viral outbreak in China. Chinese officials on Friday said 121 more people had died from COVID-19 (http://www.marketwatch.com/story/covid-19-case-tally-50090-new-cases-and-121-deaths-in-china-2020-02-14), the disease caused by a novel strain of coronavirus that emerged in Wuhan in late 2019, over the previous 24 hours, bringing the total to 1,383. The country's National Health Commission reported 5,090 new confirmed cases (http://www.marketwatch.com/story/china-reports-5090-new-covid-19-cases-121-more-deaths-2020-02-13) in mainland China, bringing the total to 63,851. The number of new cases jumped sharply on Thursday after a change in the government's counting method.
Analysts said the changes to the methodology were fueling doubts about the accuracy of China's figures.
Cleveland Federal Reserve Bank President Loretta Mester said Friday that fallout from the coronavirus on China could spill over to the U.S., but that business investment should otherwise pick up later this year (http://www.marketwatch.com/story/feds-mester-sees-weak-business-investment-picking-up-later-this-year-but-coronavirus-is-a-risk-to-outlook-2020-02-14).
Which companies were in focus?
What are other markets doing?
Oil continued to power higher. The price of a barrel of West Texas Intermediate crude for March delivery gained 63 cents, or 1.2%, to settle at 52.05 a barrel on the New York Mercantile Exchange. WTI gained more than 3% this week (http://www.marketwatch.com/story/oil-higher-aims-for-first-weekly-rise-in-6-weeks-2020-02-14), its first such gain in six weeks.
Gold for April delivery rose 0.5% (http://www.marketwatch.com/story/treasury-yields-inch-lower-ahead-of-retail-sales-industrial-production-2020-02-14) to settle at $1,586.40, notching a modest weekly gain on haven buying.
The U.S. dollar was less than 0.1% higher against a basket of rival currencies.
In Europe, the Stoxx Europe 600 slipped 0.6% to end trade at 430.52.
In Asia overnight, the China CSI 300 rose 0.7% to close at 3,987.73, the Shanghai Composite ticked up 0.4% to 2,917.01, and the Hang Seng Index closed 0.3% higher, at 27,815.60. The Nikkei 225 lost 0.6% to 23,687.59.
The benchmark U.S. 10-year Treasury notecaught a bid (http://www.marketwatch.com/story/treasury-yields-inch-lower-ahead-of-retail-sales-industrial-production-2020-02-14), with the yield shedding 2.9 basis points to 1.587%. Bond yields fall when prices rise.
-Andrea Riquier; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
February 14, 2020 16:40 ET (21:40 GMT)
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