Stocks Open Higher After Retail Sales Boost
Dow opens above 35000; S&P 500 on track to finish slightly up on the week
By Updated July 16, 2021 9:32 am ET
U.S. stocks edged up after retail sales data showed an uptick in consumer spending amid the economic reopening.
The S&P 500 added 0.3%, pushing the broad index into positive territory for the week. The Nasdaq Composite Index advanced 0.5%, pointing to gains in technology stocks. The Dow Jones Industrial Average added 0.1% to 35038.
Retail sales rose 0.6% in June, as the economy reopened more broadly and auto dealers navigated supply disruptions. Economists were expecting another decrease after May’s 1.3% drop. A gauge of consumer sentiment by the University of Michigan is scheduled for 10 a.m. ET.
In early trading, Intel rose 0.7% after The Wall Street Journal reported that the semiconductor giant was exploring a deal to acquire chip maker GlobalFoundries for around $30 billion. Moderna jumped 6% after S&P Global said it would add the pharmaceutical company to the S&P 500 index, effective as of July 21.
U.S.-listed Chinese ride-hailing firm Didi Global tumbled 3% after state security and police officials were sent to the company’s offices Friday as part of a cybersecurity investigation.
Stocks traded choppily this week as investors digested a higher-than-expected inflation reading Tuesday. This was followed by Federal Reserve Chairman Jerome Powell seeking to reassure markets that the central bank sees the rise in prices as uncomfortable but transitory and isn’t in a hurry to adjust its supportive policies.
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The inflation rate reached a 13-year high recently, triggering a debate about whether the U.S. is entering an inflationary period similar to the 1970s.
“The Fed is still being pretty patient, Powell has made it clear that they will remain pretty accommodative for some time,” said Salman Baig, a multiasset investment manager at Unigestion. “That’s a relatively good environment for risk taking—good growth, bond yields being relatively stable, investors will be OK with taking on more risk.”
In bond markets, the yield on the benchmark 10-year Treasury note ticked up to 1.324% Friday from 1.297% Thursday, reversing course after declining for two consecutive days.
Overseas, the pan-continental Stoxx Europe 600 slipped 0.1%. Swedish telecommunications-equipment maker Ericsson fell 8% after reporting a sharp decline in sales in China, and revenue growth that came in below analysts’ estimates.
Luxury label Burberry slipped 5% on concerns about the coming departure of its chief executive, despite an increase in quarterly comparable sales in line with pre-pandemic levels.
Most major benchmarks in Asia ended the week on a downward note. The Shanghai Composite Index declined 0.7% and Japan’s Nikkei 225 fell 1%.
Stocks have traded choppily this week.
Photo: brendan mcdermid/Reuters
Write to Anna Hirtenstein at
anna.hirtenstein@wsj.com