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Wall Street closes little changed; earnings remained positive, retail sales declined
16-Oct-19 16:15 ET
Dow -22.82 at 27001.98, Nasdaq -24.52 at 8124.19, S&P -5.99 at 2989.69

https://www.briefing.com/stock-market-update

[BRIEFING.COM] Wall Street finished little changed on Wednesday, as investors weighed negative macro news against another set of mostly positive earnings results. The S&P 500 (-0.2%), Dow Jones Industrial Average (-0.1%) and Nasdaq Composite (-0.3%) closed slightly lower, while the Russell 2000 (+0.1%) inched higher.

The positive reaction to today's batch of earnings reports was limited to shares of companies that reported, namely Bank of America (BAC 30.18, +0.45, +1.5%), United Airlines (UAL 89.70, +1.82, +2.1%), and J.B. Hunt Transport Services (JBHT 115.65, +4.05, +3.6%), as opposed to Tuesday's earnings-driven rally. Eight of the 11 S&P 500 sectors closed near their flat lines.

The energy sector (-1.5%) was today's laggard despite an increase in oil prices ($53.42/bbl, +0.63, +1.2%), followed by the information technology sector (-0.7%) amid weakness in the software stocks. The consumer discretionary sector (+0.4%) outperformed despite an unexpected 0.3% m/m decline in retail sales for September (Briefing.com consensus +0.3%).

The relatively conservative spending did follow an upwardly revised 0.6% increase (from +0.4%) in August, which presumably allayed an overreaction among sellers. Still, the headline figure could feed into the slowdown narrative for the U.S. economy, especially when uncertainty remains on the U.S.-China trade front.

On Wednesday, China threatened unspecified countermeasures against the U.S. after the House of Representatives approved legislation to support pro-democracy protesters in Hong Kong. The Senate has yet to vote on the measures, but the situation could complicate the completion of the first phase of a trade deal with the U.S.

In other potential deals, General Motors (GM 36.65, +0.39, +1.1%) and the UAW reached a tentative agreement that could end the monthlong strike at GM. McKesson (MCK 144.84, +6.67, +4.8%), Cardinal Health (CAH 49.07, +1.17, +2.4%) and AmerisourceBergen (ABC 86.05, +2.85, +3.4%) began talks to settle opioid litigation for $18 billion, according to The Wall Street Journal.

U.S. Treasuries finished the session on a higher note, leaving yields slightly lower. The 2-yr yield and the 10-yr yield both declined two basis points each to 1.59% and 1.75%, respectively. The U.S. Dollar Index declined 0.3% to 98.02.

Reviewing Wednesday's batch of economic data, which featured Retail Sales for September:

Total retail sales declined 0.3% month-over-month in September (Briefing.com consensus +0.3%) following an upwardly revised 0.6% increase (from +0.4%) in August. Excluding autos, retail sales declined 0.1% (Briefing.com consensus +0.2%) after increasing an upwardly revised 0.2% (from 0.0%) in August.
The upward revisions for August cushioned some of the headline blow, yet the key takeaway from the report is that it highlights some relatively conservative consumer spending activity in September that will feed into the slowdown narrative building for the U.S. economy.
Total business inventories were unchanged month-over-month in August (Briefing.com consensus +0.2%) after a downwardly revised 0.3% increase (from 0.4%) in July. Total business sales were up 0.2% following a downwardly revised 0.2% increase (from 0.3%) in July.
The key takeaway from the report is that the gap between inventory growth on a yr/yr basis (+4.2%) and sales growth (+1.1%) remains, which should help keep prices in check.
The NAHB Housing Market Index for October increased to 71 from 68 in September.
The weekly MBA Mortgage Applications Index ticked up 0.5% following a 5.4% increase in the prior week.

Looking ahead, investors will receive Housing Starts and Building Permits for September, Industrial Production and Capacity Utilization for September, the Philadelphia Fed Index for October, and the weekly Initial and Continuing Claims on Thursday.

Nasdaq Composite +22.4% YTD
S&P 500 +19.3% YTD
Dow Jones Industrial Average +15.8% YTD
Russell 2000 +13.1% YTD

Market Snapshot
Dow 27001.98 -22.82 (-0.08%)
Nasdaq 8124.19 -24.52 (-0.30%)
SP 500 2989.69 -5.99 (-0.20%)
10-yr Note +2/32 1.748
NYSE Adv 1496 Dec 1370 Vol 753.0 mln
Nasdaq Adv 1594 Dec 1467 Vol 1.9 bln

Industry Watch
Strong: Materials, Consumer Discretionary
Weak: Information Technology, Energy