Stocks clinging onto modest gains
The major indices are trading with modest gains, albeit near their session lows amid a lack of conviction. The S&P 500 is up 0.3%, which puts it ahead of the Nasdaq Composite (+0.1%) but behind the Dow Jones Industrial Average (+0.7%).The positive bias is being attributed to retail sales increasing 1.9% m/m in September (Briefing.com consensus 0.6%) and news that Pfizer (PFE 37.43, +0.89, +2.4%) may file for emergency use authorization for its COVID-19 vaccine by the end of November. Appropriately, the health care sector (+1.2%) is among today's leaders, along with industrials (+1.0%) and utilities (+1.2%).  The industrials sector has been supported by gains in Boeing (BA 168.98, +4.72, +2.9%) and Caterpillar (CAT 169.78, +4.74, +2.9%), which are outperforming after Boeing's 737 MAX was deemed safe to fly by EU regulators and CAT was upgraded to Overweight from Equal Weight at Wells Fargo.Conversely, relative weakness in Apple (AAPL 119.61, -1.10, -0.9%) has dragged on index performance. The lightly-weighted energy (-1.1%) and real estate (-0.2%) sectors are also trading lower, with the energy sector pressured by a 7% decline in Schlumberger (SLB 15.23, -1.18, -7.2%) following its earnings results. Transportation stocks are also underperforming following disappointing earnings reactions in J.B. Hunt (JBHT 130.32, -4.46, -2.4%) and Kansas City Southern (KSU 179.54, -4.46, -2.4%). The Dow Jones Transportation Average is down 0.8%. Although the market didn't react to an unexpected 0.6% m/m decline in industrial production for September (Briefing.com consensus +0.6%), the report might be restraining early enthusiasm in addition to the disappointing earnings reactions. Reviewing today's economic data, which featured Retail Sales for September:Total retail sales increased 1.9% m/m in September (Briefing.com consensus +0.6%). Excluding autos, retail sales were up 1.5% m/m (Briefing.com consensus +0.3%). On a yr/yr basis, total retail sales were up 5.4%. Excluding autos, they were up 4.0%.The key takeaway from the report is that the sales gains were broad based and driven by increases in discretionary categories, which will validate expectations for a huge rebound in GDP growth in the third quarter.Industrial production declined 0.6% m/m in September, which was well below expectations (Briefing.com consensus +0.6%). Total capacity utilization of 71.5% also disappointed (Briefing.com consensus 71.9%).The key takeaway from the report is that it defied the rebound momentum that had been building in the third quarter. It was the first decline in five months, but despite the September decline, industrial production increased at an annual rate of 39.8% for the third quarter.The preliminary University of Michigan's Index of Consumer Sentiment for October checked in at 81.2 (Briefing.com consensus 82.0). That was a bit weaker than expected, but an improvement from the final September reading of 80.4.The key takeaway from the report is that concerns about current conditions, which were linked to slowing employment growth, a pickup in COVID-19 infections, and the lack of additional stimulus, were offset mostly by an improvement in attitudes about prospects for the year ahead.Business inventories increased 0.1% in August (Briefing.com consensus 0.4%) following a 0.1% increase in July.