Weak economic data drags S&P 500, Dow futures
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BY: Moses olajuwon Obajemu
Futures linked to the S&P 500 and Dow dipped on Friday as data showed domestic retail sales growth slowed more than expected in July, adding to worries about a wobbly post-pandemic economic recovery in the absence of a new U.S. fiscal stimulus bill.
Aggressive stimulus measures have helped Wall Street’s main indexes bounce from a coronavirus-driven crash in March, and the S&P 500 briefly traded above its Feb. 19 record close for a second straight day on Thursday.
But the benchmark index has struggled to top its all-time high of 3,393.52, which was also hit on Feb. 19.
Reuters says data on Friday showed U.S. retail sales increased less than expected last month and could slow further due to spiraling COVID-19 cases and a reduction in unemployment benefit checks.
The reading also comes at a time when the domestic labor market is struggling and a nascent rebound in China appears to be slowing.
“The state of the consumer and the ability in the interest to spend is going to be key in self-sustaining the economic recovery ultimately,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
A deadlock between top Democrats and the White House over more stimulus measures to support the economy has also been a major point of focus.
Uncertainty over the timing of an agreement has undercut sentiment in recent sessions, with the upcoming U.S. presidential elections expected to add another layer of caution.
At 8:55 a.m. ET, Dow e-minis were down 93 points, or 0.33%, S&P 500 e-minis were down 3.25 points, or 0.1% and Nasdaq 100 e-minis were up 27 points, or 0.24%.
Leading gains among Nasdaq 100 stocks trading before the bell was Applied Materials Inc, up 3.7%, after it forecast fourth-quarter revenue above analysts’ estimates following a rebound in demand for chip equipment and services.
Electric car maker Tesla rose 3.2% after Morgan Stanley upgraded the stock, citing potential in the firm’s battery business.
Chinese search engine giant Baidu Inc posted quarterly revenue a notch above estimates, but its shares slid 5.1% after its streaming service iQIYI said it was being probed by the U.S. Securities and Exchange Commission.