This post was originally published on this site
Investing.com — U.S. stock markets opened mixed, unimpressed by a surprise increase in retail sales in August and the lack of any further improvement in the trend for jobless claims.
The Dow Jones Industrial Average initially opened up 100 points, or 0.3%, while the S&P 500 was flat and the Nasdaq Composite was down 0.3%. But by 10:26 AM ET, the Dow was down more than 170 points, and the S&P and Nasdaq each had fallen 0.6%.
U.S. retail sales rose 0.7% in August, compared with expectations for a drop of 0.8%. However, July’s decline was revised down to 1.8% from 1.1%, partially neutralizing the positive surprise. Initial claims for jobless benefits, meanwhile, ticked up last week to 330,000 from 312,000, consistent with other data points showing a weakening in some pockets of the service sector due to the continued strength of Covid-19 outbreaks in the month.
Recent data have shown a clear drop in new cases in southern states such as Texas and Florida since the start of September, raising hopes that the end of the delta-variant wave of Covid-19 is in sight.
Analysts argued that the retail sales were perhaps stronger than they looked, given that the 1.8% rise in sales excluding autos (which strips out one of the more volatile segments of recent months’ data) was up 1.8%, well ahead of the unchanged number expected.
“The bottom line here is that this report suggests Delta fears aren’t stopping people spending some of their abundant cash resources on goods, even as they retreat from services,” said Pantheon Economics chief economist Ian Shepherdson, who argued that the numbers “will trigger a wave of upgrades to forecasts for Q3 consumption and GDP growth.”
While the third quarter is still likely to show much slower growth in general than the previous second month due to the fading of stimulus effects, “upside surprises on this scale don’t come often, and this one indicates a real degree of resilience on the part of consumers,” Shepherdson said.
Among individual stocks, Dutch Bros (NYSE:BROS) rose another 15%, the coffee chain adding to the 58% gain it made on its debut on Wednesday.
Ironnet (NYSE:IRNT) stock continued its rocket-like ascent thanks to a hard squeeze by retail traders. The cybersecurity company, which boasts a number of formerly high-ranking staff at the U.S. National Security Agency, was up 27% and has now quadrupled in the last three weeks. Uranium stocks, however, were cooling off after their stellar run: NexGen Energy (NYSE:NXE) stock fell 3.6% while Uranium Energy (NYSE:UEC) stock fell 6.0%.
Elsewhere, Wynn Resorts (NASDAQ:WYNN) and Las Vegas Sands (NYSE:LVS) stocks both continued to fall as broker downgrades followed the news of tighter restrictions on their Macau gambling businesses in China. Both were down by 3.3%.
