Markets

Midday Update: Wall Street Returns to Plus Column for 2014, Shrugs off Weak Retail Sales

Stocks are building on overnight strength and are back in the plus column for the year after shrugging off weak retail sales as easing geo-political pressures, lowered expectations for the U.S. Federal Reserve to hike short-term rates, and falling energy prices keeps global equity markets afloat.

Into Wednesday's open, U.S. stocks drifted off their highs after retail sales were only unchanged in July, missing forecasts for a modest 0.2% gain. While blue-chips retreated, the Nasdaq was insulated from the negative reaction to sales, as chipmakers and biotech stocks continued to outperform, lifting the tech-heavy index to a 2-week high. Nearly all Dow Jones components are in positive territory with the exception of utilities which remain under pressure due to this week's rise in the 10-year Treasury note yield back towards 2.50%.

Today's other economic data included an as-expected gain of 0.4% in business inventories coupled with a 0.3% gain in sales, leaving the inventory/sales ratio unchanged at 1.29.

Also, businesses in the Atlanta Federal Reserve region expect inflation to increase to a 2.0% pace from 1.9% in July.

European markets continue to gain support from calming geo-political tensions as Russia begins its humanitarian aid convoys to Ukraine under coordination with the Red Cross. UK equities strengthened after the Bank of England lowered its outlook for wage growth, reducing odds for higher UK rates. And despite weak Chinese retail sales and an unexpected contraction in EU-zone industrial production, global equities prices were all higher, spilling into early U.S. trading.

Crude oil was down $0.53 to $96.84 per barrel. Natural gas was down $0.11 to $3.90 per 1 million BTU. Gold was up $4.10 to $1,314.90 an ounce, while silver was down $0.11 to $19.79 an ounce. Copper was down $0.04 to $3.11 per pound.

Among energy ETFs, the United States Oil Fund was down 0.47% to $35.83 with the United States Natural Gas Fund was down 2.70% to $21.29. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was up 0.29% to 27.43 while SPDR Gold Shares was up 0.22% to $126.26. The iShares Silver Trust was down 0.89% to $19.00.

UPSIDE MOVERS

(+) GRUB (+9.25%) Zach's Equity Research report says analysts' estimates have been going higher over the past several months

(+) REED (+14.48%) Swings to a profit in Q2 and beating street estimates

(+) CSIQ (+17.54%) Reported strong Q2 results, with both earnings and revenue beating estimates

DOWNSIDE MOVERS

(-) KING (-22.91%) Reported lower-than-expected Q2 revenue, cut full-year guidance, downgraded by RBC Capital to Sector Perform

(-) SEAS (-30.37%) Q2 EPS and revenue miss street expectations

(-) CREE (-9.07%) Mixed Q4 results and Q1 guidance in line to below Street estimates

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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