News Column

Stocks May Open Higher Despite Weak Sales Data - US Commentary

August 13, 2014

WASHINGTON (Alliance News) - After moving to the upside earlier this morning, stock futures have held onto the bulk of their gains despite the release of disappointing retail sales data. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 41 points.

The upward momentum for the markets comes even though the Commerce Department recently released a report showing that retail sales unexpectedly came in unchanged in the month of July.

The Commerce Department said retail sales were virtually unchanged in July after edging up by 0.2% in June. Economists had been expecting another 0.2% increase.

Excluding a modest drop in auto sales, retail sales inched up by 0.1% in July compared to a 0.4% increase in the previous month. Ex-auto sales had been expected to climb by another 0.4%.

The positive reaction to the weaker than expected sales data may partly reflect easing concerns about the outlook for interest rates.

In related news, department store operator Macy's (M) released its second quarter results this morning, reporting earnings that increased year-over-year but came in below analyst estimates.

Macy's Chairman and CEO Terry Lundgren noted that the company's confidence for the second half is tempered by the reality that many customers still are not feeling comfortable about spending more in an uncertain economic environment.

Meanwhile, Deere (DE) is also likely to be in focus after the agricultural machinery maker reported better than expected third quarter earnings but trimmed its full-year earnings forecast.

Networking giant Cisco Systems (CSCO) could also see increased activity ahead of the release of its fiscal fourth quarter results after the close of trading.

Traders also continue to keep a close eye on any developments overseas amid ongoing conflicts in Ukraine and Iraq.

While selling pressure remained relatively subdued, stocks moved modestly lower over the course of the trading day on Tuesday. The losses on the day partly offset the strength that was seen on Monday.

The major averages ended the day in negative territory but well off their lows for the session. The Dow edged down 9.44 points or 0.1% to 16,560.54, the Nasdaq fell 12.08 points or 0.3% to 4,389.25 and the S&P 500 slipped 3.17 points or 0.2% to 1,933.75.

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Source: Alliance News

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