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Nasdaq ekes out gain but S&P 500, Dow end lower, despite hotter-than-expected retail sales

MarketWatch logo MarketWatch 9/16/2021 William Watts
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U.S. stock benchmarks finished an up-and-down day mixed, with the Nasdaq Composite managing to register a slight gain, as August retail sales showed an unexpected rise and a measure of activity in the Federal Reserve’s Philadelphia district came in stronger than expected.

How stocks traded
  • The Dow closed down 63.07 points, or 0.2%, to 34,751.32.
  • The S&P 500 ended 6.95 points, or 0.2%, lower at 4,473.75.
  • The Nasdaq Composite Index gained 20.39 points, or 0.1%, to finish at 15,181.92.

Video: Dow drops 300+ points as retail sales drop in July (Yahoo! Finance)

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On Wednesday, the Dow industrials rose 236.82 points, or 0.7%, to 34,814.39, the S&P 500 rose 0.9%, and the Nasdaq Composite gained 0.8%.

What drove markets

Data showed August retail sales rose 0.7%, defying forecasts for a 0.7% fall. Excluding autos, sales jumped 1.8%, compared with expectations for a rise of 0.2%.

Separately, the Philadelphia Fed’s activity index jumped to 30.7 in September from 19.4 a month earlier. At the same time, data showed first-time claims for unemployment benefits rose more than expected in the week ending Sept. 11, though continuing claims fell.

“Fears that a collapse in consumer sentiment would cut retail sales have not yet been confirmed. Other indicators released at the same time as the sales report also give hope for the better,” said Alex Kuptsikevich, senior market analyst at FxPro, in emailed comments.

But equities struggled to rally, with the S&P 500 and the Nasdaq finishing in negative territory and analysts noting that the headline rise in retail sales was offset partially by cuts to the July data.

A late-session rally briefly helped to propel all three major equity indexes into positive territory but only the Nasdaq Composite closed in the green, eking out a gain for the second day in a row.

“For the most part we’re still seeing the move higher in Treasury yields capping out and giving the green light for big tech to firm up,” said Edward Moya, a senior market analyst with Oanda Corp. “We’re seeing investors go back into some of their favorite stocks and after everything is processed, the American consumer is too strong to bet against this stock market.”

Historically, September tends to be a weak month for U.S. stocks and the Dow is down 1.55% through first 10 trading days of September, while the S&P 500 is down 0.93%, according to Dow Jones Market Data. Friday also brings the so called quadruple witching day when stock options, single stock futures, stock-index futures and stock index options all expire which sometimes creates some volatility.

See: Stock-market investors brace for ‘quadruple witching’ this Friday

While the coronavirus delta variant has hit some U.S. states hard, the debate over the need for booster shots continues, with the Food and Drug Administration saying the currently administered vaccines provide sufficient protection against severe disease and death from COVID-19, while vaccine maker Moderna Inc. says effectiveness wanes over time.

Which companies were in focus?
  • Shares of Cisco Systems Inc. closed down 0.4% after the company late Wednesday forecast revenue will grow 5% to 7% over its next four fiscal years, easily outpacing analysts’ projections. 
  • Beyond Meat Inc. shares fell 2.3%, after Piper Sandler analyst Michael Lavery turned bearish on the plant-based meat company, citing a weaker growth outlook and concern the outlook for food service sales may be overly optimistic.
  • AMC Entertainment Holdings Inc. announced in August it would accept bitcoin for online ticket and concession purchases before the end of the year. In a Wednesday tweet, the Chief Executive Adam Aron said Ethereum litecoin and Bitcoin Cash would also be accepted. Shares fell 1.7%, after dropping 9.4% the previous two sessions.
How did other assets fare?
  • The yield on the 10-year Treasury note rose 2.9 basis points to 1.331%. Yields and debt prices move in opposite directions.
  • The ICE U.S. Dollar Index a measure of the currency against a basket of six major rivals, jumped 0.3% at 92.84.
  • Oil futures pulled back from a seven-week high, with the U.S. benchmark settling flat at $72.61 a barrel on the New York Mercantile Exchange Gold futures fell $38.10, or 2.1%, to settle at $1,756.70 an ounce, which was the steepest daily percentage and dollar decline for bullion since Aug. 6. 
  • In European equities, the Stoxx Europe 600 rose 0.4% and the FTSE 100 gained 0.2%.
  • In Asia, the Shanghai Composite fell 1.3%, Hong Kong’s Hang Seng Index dropped 1.5% and Japan’s Nikkei 225 lost 0.6%.

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