By Yasin Ebrahim
Investing.com – The S&P 500 fell Friday as a surprise rebound in retail sales and better-than-expected earnings weren’t enough to coax the bulls out from hiding.
The S&P 500 fell 0.20%, the Dow Jones Industrial Average slipped 0.43%, or 151 points, the Nasdaq was down 0.32%.
The Commerce Department said Friday that retail sales rose 0.6% last month. That confounded economists’ forecast for a 0.3% decline. The retail sales control group – which has a larger impact on U.S. GDP – climbed 1.1%, well ahead of expectations for a 0.4% rise.
The data suggest “the consumer is still alive and kicking, and while spending is certainly shifting to services, this is not inducing steep declines in goods demand,” Jefferies (NYSE:JEF) said. “As for inflation, aside from a few categories (notably autos), surging prices are not deterring consumers just yet.”
Signs that the consumer, which contributes two-thirds of economic growth, continues to spend failed to spark a bid in cyclicals.
Energy led the move lower as oil prices added to losses this week and remain on pace for their biggest weekly loss since May. Oil prices have been on the backfoot amid fears of major oil producers are set to increase output following a deal by Saudi Arabia and United Arab Emirates earlier this week.
But some suggest that the oil demand will continue to outstrip supply. “Even if one factors in the OPEC+ production hike planned in July, this leaves a substantial supply deficit that OPEC+ would need to offset by further expanding production,” Commerzbank (DE:CBKG) said in a note.
But health care stocks were in the ascendency, led by a rally in Moderna .
Moderna Inc (NASDAQ:MRNA) jumped nearly 8% on news that the stock would be included in the S&P 500 as of July 21st.
BioNTech SE (NASDAQ:BNTX), meanwhile, was up more than 3% after the U.S. Food and Drug Administration has granted priority review of the biologics license application of their mRNA Covid-19 vaccine in patients aged 16 years and older.
The bid in big tech seen earlier this week continued to fade, with the Fab 5, with exception of Microsoft (NASDAQ:MSFT, mostly lower.
Facebook (NASDAQ:FB), Google-parent Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), and Amazon.com (NASDAQ:AMZN) were lower.
Sentiment on stocks have also been soured this week following a resurgence in Covid-19 infections, brought on by the Delta variant. Covid deaths are on the rise again following weeks of decline.
“After weeks of declines, seven day average daily deaths have increased by 26% to 211 per day,” said Dr. Rochelle Walensky, the director of the Centers for Disease Control and Prevention during a press briefing Friday.