Before the Bell - Wall Street will shortly open for business on the penultimate trading day of this holiday-shortened week. And the buyers and sellers will start following a session that gyrated sharply during the day and finished on a mixed note. In all it was the second uneven performance in a row. Meantime, after this mixed result, the equity futures are pointing to a lower opening when trading resumes. Also, one hour before the start of the current session, the Labor Department reported an increase in weekly jobless filings.
Specifically, the government affirmed that in the week ended February 13th, the nation saw 861,000 new claims for unemployment insurance filed. That was up 10,000 from the upwardly revised tally from the week before. The consensus forecast had been for 100,000 fewer new claims. In other news before the bell that could have an influence on the day's market action, the U.S. Census Bureau issued data on housing starts and building permits for the month of January. Here, activity continued to rise for permits, but dipped for starts. Finally, in news before the bell, shares of Walmart (WMT) are poised to drop sharply on an earnings miss.
These latest issuances were on top of a trio of reports released yesterday. At that time,, the government reported that retail sales had surged by 5.3% in January, the first positive reading since September. It also compared well with a 1.0% decline in December. Expectations had been for a much more modest increase in the latest month of 1.0%. Also encouraging were strong readings on industrial production and factory utilization. These surveys suggest that GDP growth in the first quarter could exceed 4%, edging nominally above the fourth-quarter tally.
One less upbeat note, however, was a report showing that U.S. producer prices had posted their biggest gain since late 2009, rising by 1.3% in January. That suggested inflation might be starting to heat up at the factory level. Recently, there have been concerns about rising prices. That worry has led to a modest uptick in Treasury note and bond yields. Should yields continue to trend upward, fixed-income securities could provide some competition for equities after years in which stocks have largely had the playing field to themselves..
The run up in bond yields, lingering uncertainty on the pace of coronavirus vaccinations, and doubts about how much of President Biden's massive stimulus package will be adopted by a divided Congress are contributing to the latest series of gyrations in the market. These were on display yesterday. Specifically, the market sold off early, with the Dow Jones Industrial Average falling by nearly 200 points early in the session before turning around to close up by 90 points. Things were less positive on the NASDAQ, where in spite of late buying that composite still lest 82 points on weakness in tech names such as Apple (AAPL). Shares of Amazon.com (AMZN), however, rose nicely on the day helping the NASDAQ to pare its losses toward the close. – Harvey S. Katz, CFA