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Stock market closes mixed, supported by strength in U.S. consumer
15-Aug-19 16:15 ET
Dow +99.97 at 25579.37, Nasdaq -7.32 at 7766.63, S&P +7.00 at 2847.60

https://www.briefing.com/investor/markets/stock-market-update/2019/8/15/stock-market-closes-mixed-supported-by-strength-in-us-consumer.htm

[BRIEFING.COM] The stock market finished mixed on Thursday, as investors weighed the resiliency of the U.S. consumer against familiar growth concerns. The S&P 500 (+0.3%) and Dow Jones Industrial Average (+0.4%) finished higher, while the Nasdaq Composite (-0.1%) and Russell 2000 (-0.4%) finished lower.

The market has been on edge this month amid the volatility and recessionary fears, which have been heightened by weakening global data and a trade dispute with China. On Thursday, China added to those worries after it threatened to retaliate against U.S. tariffs on Chinese imports but said it hopes the U.S. can meet halfway in trade talks.

U.S. economic data, meanwhile, helped placate some growth concerns. The big report today, Retail Sales for July, showed retail sales increase 0.7% m/m last month (Briefing.com consensus 0.3%). The data coincided with upbeat results and guidance from Walmart (WMT 112.69, +6.49, +6.1%), which corroborated the view that the U.S. consumer could be the key to ward off a recession.

Still, there wasn't a lot of conviction in today's action with the market swaying between gains and losses. Leadership was concentrated among the defensive-oriented sectors -- consumer staples (+1.5%), real estate (+1.3%), and utilities (+1.3%) -- which benefited from Walmart's report and another drop in U.S. Treasury yields.

Today's laggards included the S&P 500 cyclical sectors. The energy sector (-0.5%) fell alongside oil prices ($54.38/bbl, -$0.77, -1.4%). The industrials sector (-0.2%) was subject to a 11.3% drop in shares of General Electric (GE 8.01, -1.02) after it was accused of accounting fraud. Information technology (-0.2%) was weighed down by disappointing guidance from Cisco Systems (CSCO 46.25, -4.36, -8.6%).

The U.S. Treasury market, meanwhile, continued to draw in buyers. Yields took a sharp leg lower during the day following some central bank news: (1) The Wall Street Journal reported that the European Central Bank is preparing a "very strong package" of stimulus measures to boost the eurozone economy and (2) the Mexican Central Bank lowered its key lending rate for the first time in over five years.

The 2-yr yield finished nine basis points lower at 1.49%, and the 10-yr yield finished five basis points lower at 1.53%. The 30-yr yield fell below 2.00%, finishing five basis points lower at 1.98%. The U.S. Dollar Index increased 0.1% to 98.10.

Reviewing Thursday's big batch of economic data:

Retail sales increased 0.7% m/m in July (Briefing.com consensus 0.3%) and were up 1.0%, excluding autos (Briefing.com consensus 0.3%).
The key takeaway from the report is that it offered a clear reminder that the U.S. consumer is still in good shape, which is key to fending off a recession.
Initial claims for the week ending August 10 increased by 9,000 to 220,000 (Briefing.com consensus 215,000). Continuing claims for the week ending August 3 jumped by 39,000 to 1.726 million.
The key takeaway from the report is that there wasn't any meaningful shift in the underlying trend (which is solid) for initial claims, as the four-week moving average moved up just 1,000 to a low 213,750.
Nonfarm business sector productivity increased 2.3% in the second quarter (Briefing.com consensus 1.3%) after increasing a revised 3.5% in Q1 (from 3.4%), according to the preliminary reading. Unit labor costs increased 2.4% in the second quarter (Briefing.com consensus 1.6%) after increasing a revised 5.5% (from -1.6%) in Q1.
The key takeaway from the report is the improved trend in productivity, which was up 1.8% from the second quarter of 2018 to the second quarter of 2019 versus the annual average of 1.3% for 2018 and 2017, and 0.3% in 2016.
Industrial production decreased 0.2% in July (Briefing.com consensus 0.1%) after increasing a revised 0.2% (from 0.0%) in June. The total industry capacity utilization rate fell to 77.5% (Briefing.com consensus 77.8%) from a revised 77.8% (from 77.9%) in June.
The key takeaway from the report is that the July decrease in industrial production has reduced the yr/yr growth rate to just 0.5%.
The Empire State Manufacturing Survey for August increased to 4.8 (Briefing.com consensus 1.1) from the prior month's reading of 4.3.
The Philadelphia Fed Index for August came in at 16.8 (Briefing.com consensus 10.0), below the 21.8 reading in July.
The NAHB Housing Market Index increased to 66 in August from 65 in July.

Looking ahead, investors will receive Housing Starts and Building Permits for July and the preliminary University of Michigan Index of Consumer Sentiment for August on Friday.

Nasdaq Composite +17.1% YTD
S&P 500 +13.6% YTD
Dow Jones Industrial Average +9.7% YTD
Russell 2000 +8.4% YTD