Stocks launched in a tight, flat mix Friday as weaker-than-forecast August retail sales and industrial production, a possible U.K. terror attack and a North Korean missile test kept investors in a cautious mood.
The Dow Jones industrial average added 0.2%, pressing to another new high as Johnson & Johnson (JNJ), Verizon (VZ) and Caterpillar (CAT) showed strength in opening trade. The S&P 500 futures turned narrowly positive, while the Nasdaq Composite trimmed its thin, early gains as Apple (AAPL) and three of four FANG stocks stuck close to their starting levels in early trade.
Global markets paused, but showed little response to a missile fired out of North Korea and over Japan early Friday. In Japan, Tokyo’s Nikkei 225 recovered to a 0.5% advance on Friday, leaving it up 3.3% for the week and marking its first weekly close above its 50-day moving average since July. China’s markets posted a mixed finish, with Hong Kong’s Hang Seng Index up 0.1% Friday and ahead 0.5% for the week.
Markets traded lower in Europe, where Frankfurt’s DAX slipped 0.2% and the CAC-40 in Paris fell 0.4%. The FTSE 100 in London dropped 1.2% — taking an early fall after Britain’s pound leaped to its highest level vs. the dollar since the U.K.’s June 2016 Brexit vote, then coming under additional pressure after a bomb exploded on a London subway, reportedly injuring 22 people in what police there were treating as a terrorist attack. For the week, the DAX and CAC-40 are tracking toward gains of around 2%, while the FTSE 100 is down more than 2%.
Boeing, Nvidia Break Out, Oracle Dives
Caterpillar rose 0.8% to take an early lead among the Dow Jones industrials. The stock is rattling off new highs, and extended after a July rebound from 10-week support.
Apple gained 0.3%, preparing to cap its seventh week of trade since edging above a 156.75 buy point. The tight, incremental gains are technically positive, but fundamentally maddening for investors who bought in as the stock cleared the entry point. Apple has now given up ground in six of the past seven sessions, despite this week’s launch of the iPhone X and a passel of device updates, and is potentially heading for a test of support at its 50-day moving average.
Oracle (ORCL) dropped 5.9%, the worst early hit among S&P 500 stocks. Better-than-expected fiscal first-quarter results reported after Thursday’s close weren’t enough to encourage investors, who focused on second-quarter guidance below consensus targets. The loss sent shares back below a 51.95 buy point as well as the stock’s 50-day moving average, triggering a sell signal.
Tempe, Ariz.-based First Solar (FSLR) grabbed an early 5% gain to lead the S&P 500. The company is still projected to see two years of profit declines, but shares are up 90% from an April low and looking for volume on a rebound from 10-week support. The heavy-volume leap lifted the stock above a 50.31 buy point in a six-week flat base.
Economic News: Retail Sales, Empire State Survey, Consumer Sentiment
In economic news, retail sales took an unexpected dip in August, down 0.2%, according to the Commerce Department. That reversed July’s 0.3% increase and disappointed consensus views for a 0.1% gain. Minus autos and gas, sales dipped 0.1%, vs. July’s 0.5% gain and estimates for a 0.3% increase.
Manufacturing activity in the New York region slowed less than expected in September, putting the New York Federal Reserve’s September Empire State Manufacturing Survey at 24.4 for the month. That was just below August’s 25.2 reading, but better than the drop to 19 forecast by economists.
Industrial output slipped 0.9% in August, the Federal Reserve reported, down from a 0.4% gain in July and missing economists targets for a slowdown to growth of 0.1%. Capacity utilization decreased to 76.1%, also below estimates for a steady-as-she-goes reading of 76.7%.
Commerce Department business inventories estimates for July and the University of Michigan’s preliminary reading on September consumer sentiment come out at 10 a.m. ET.
At 1 p.m., Baker Hughes (BHGE) delivers its weekly report of oil and gas drilling rig activity. Oil prices reversed early gains, sending West Texas Intermediate oil down 0.1% and back below the $50 per barrel mark.