US Stock Market Overview - Stock Rise Led by Strong Retail Sales

Andrew Cummings
October 17, 2020

Despite these headwinds still threatening to steer the S&P 500 even lower, VIX Index term structure compression highlights one reason to stay optimistic on stocks. Excluding autos, the gain amounted to 1.5%, which also was better than the 0.4% estimate.

The S&P 500 was up 0.47 points, or 0.01 percent, to 3,483.81. Vaccine hopes and strong retail sales data enticed investors to go shopping for stocks.

However, separate data from the Federal Reserve showed industrial production in September declining for the first time in five months, losing 0.6 per cent as manufacturing and utilities fell. Expectations had been for retail sales to increase by 0.7%, up from a 0.6% rise in August.

Major equity indexes in the USA opened sharply lower on Thursday as safe-haven flows continue to dominate financial markets.

Spread betting quotes suggest the Dow Jones Industrial Average will open at around 28,537, up 43 points on last night's close.

Hopes of another round of fiscal aid to support the USA economy's recovery helped fuel Wall Street's recent rally, bringing the S&P 500 and Nasdaq earlier this week to within 2% of their record closing highs from Sept 2.

NASDAQ measures a number of indices reflecting the reaction of USA's high tech markets and business environments on the country's political and economic developments which have an impact on high tech markets, "Armenpress" reports.

Pfizer Inc announced it could apply for US authorization for the COVID-19 vaccine it is developing with German partner BioNTech in November.

"It will be a busy end to the week for U.S. economic releases, with September retail sales and IP [industrial production] reports set to provide further insight into the extent to which GDP [gross domestic product] has rebounded in Q3 [third quarter]", said Daiwa Capital Markets.

Latest data showed US retail sales increased more than expected in September, though recovery from the recession is at a crossroads as government money runs out and new COVID-19 infections surge across the country.

"In addition, the preliminary results of the University of Michigan's consumer survey for October will also be worth watching", it added.

"The seven-day average has risen by 55.5% since the September 12 low. The test positivity rate has increased over the past month, but not by much, and the recent trend is steady", Shepherdson noted.

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