Unexpected Drop in Retail Sales May Weigh on Wall Street
By Investors Hub
The major U.S. index futures are pointing to a lower opening on Wednesday, with stocks likely to give back ground following the rally seen in the previous session.
Lingering uncertainty about a potential U.S.-China trade deal may weigh on the markets, as new reports raised questions about the ?phase one? deal announced by President Donald Trump last week.
A Wall Street Journal report noted questions remain about how much U.S. agricultural products China intends to buy and the time frame for the purchases, while a Bloomberg report said China wants tariffs rolled back before it moves forward.
Negative sentiment may also be generated in reaction to a Commerce Department report showing an unexpected decrease in U.S. retail sales in the month of September.
However, the weaker than expected data may reinforce expectations for another interest rate cut by the Federal Reserve at its next monetary policy meeting later this month.
The early selling pressure may also be offset by a positive reaction to the latest batch of earnings news, with Bank of America (BAC) moving notably higher in pre-market trading after reporting better than expected third quarter results.
Following the lackluster performance seen on Monday, stocks moved sharply higher over the course of the trading day on Tuesday. With the jump, the major averages extended the strong upward move seen in the latter half of last week.
The major averages ended the day firmly in positive territory but off their highs of the session. The Dow jumped 237.44 points or 0.9 percent to 27,024.80, the Nasdaq soared 100.06 points or 1.2 percent to 8,148.71 and the S&P 500 surged up 29.53 points or 1 percent to 2,995.68.
The rally on Wall Street came as the spotlight shifted to corporate earnings news, with upbeat results from some big-name companies generating considerable buying interest.
Corporate news has recently taken a backseat to developments on the trade front but is likely to attract attention as earnings season ramps up in the coming days.
Financial giant JPMorgan Chase (JPM) helped lead the advance on Wall Street after reporting third quarter results that exceeded analyst estimates on both the top and bottom lines.
Shares of UnitedHealth (UNH) also soared after the health insurer reported better than expected third quarter results and raised its full-year guidance.
Citigroup (C) and Johnson & Johnson (JNJ) also reported third quarter earnings that beat estimates, Goldman Sachs (GS) reported earnings that missed expectations.
Semiconductor stocks showed a substantial move to the upside over the course of the session, driving the Philadelphia Semiconductor Index up by 2.2 percent to a new record closing high.
The upbeat earnings news from JPMorgan and Citigroup also contributed to a rally by financial stocks, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index surging up by 1.8 percent and 1.5 percent, respectively.
Healthcare, biotechnology, and transportation stocks also saw notable strength, moving higher along with most of the other major sectors.
Meanwhile, gold stocks were among the few groups to buck the uptrend, moving lower along with the price of the precious metal.