Investing.com – The S&P 500 ended a three-week winning streak on Friday as an unexpected rebound in retail sales indicating a stronger consumer and better-than-expected earnings this week were largely shelved.
The index fell 0.75%, slipped 0.86%, or 299 points, the Nasdaq fell 0.80%.
The Commerce Department said on Friday that retail sales had increased. This confused economists’ forecasts for a drop of 0.3%. The retail sales control group – which has a bigger impact on US GDP – is well ahead of expectations of a 0.4% increase.
The data suggests that “the consumer is still alive, and while spending is certainly shifting to services, it is not leading to sharp declines in demand for goods,” said Jefferies (NYSE :). “As far as inflation is concerned, apart from a few categories (notably automobiles), soaring prices are not yet deterring consumers. “
Signs that consumers, who contribute two-thirds of economic growth, continue to spend haven’t triggered an offer on cyclicals.
Energy led the move lower as oil prices added to losses this week for their biggest weekly loss since May. Oil prices have retreated as major oil producers fear increasing production following an agreement between Saudi Arabia and the United Arab Emirates earlier this week.
But some suggest that demand for oil will continue to exceed supply. “Even taking into account the increase in OPEC + production expected in July, this leaves a substantial supply gap which OPEC + is expected to make up with further expansion in production,” Commerzbank said (DE 🙂 in a note.
Healthcare stocks, healthcare stocks were up, driven by a rally in Modern .
Moderna Inc (NASDAQ 🙂 jumped 10% on news that the stock would be included in the S&P 500 as of July 21.
BioNTech SE (NASDAQ :), meanwhile, rose more than 4% after the United States Food and Drug Administration granted priority review of the biologics license application for their Covid-19 mRNA vaccine. in patients 16 years of age and older.
The big tech supply seen earlier this week continued to wane, with the Fab 5 closing in the red.
Microsoft (NASDAQ :, Facebook (NASDAQ :), Google Parent Alphabet (NASDAQ :), Apple (NASDAQ 🙂 and Amazon.com (NASDAQ 🙂 were down.
Sentiment over stocks this week has also been soured following a resurgence in Covid-19 infections, brought on by the Delta variant.
“After weeks of declines, the seven-day average daily deaths rose 26% to 211 per day,” Dr. Rochelle Walensky, director of the Centers for Disease Control and Prevention, said at a press briefing Friday.
The dark weekend on Wall Street comes even as the quarterly earnings season has started off on a good footing.
“Overall, 8% of S&P 500 companies have released actual results for the second quarter of 2021 to date. Of those companies, 85% reported actual EPS higher than estimated, which is above the five-year average of 75%, ”according to FactSet.