Mixed Economic Data Leads To Mixed Close On Wall Street

(RTTNews) - Following the sell-off seen in the previous session, stocks showed a lack of direction throughout the trading day on Thursday. The major averages spent the day bouncing back and forth across the unchanged line before eventually closing mixed.

While the tech-heavy Nasdaq edged down 7.32 points or 0.1 percent to 7,766.62, the Dow climbed 99.97 points or 0.4 percent to 25,579.39 and the S&P 500 rose 7.00 points or 0.3 percent to 2,847.60.

The choppy trading on Wall Street came as traders digested an avalanche of U.S. economic data, including mixed reports on retail sales and industrial production.

The Commerce Department released a report before the start of trading showing U.S. retail sales climbed by much more than expected in July, partly reflecting the impact of online retail giant Amazon's (AMZN) Prime Day promotion.

The report said retail sales climbed by 0.7 percent in July after rising by a revised 0.3 percent in June. Economists had expected retail sales to rise by 0.3 percent compared to the 0.4 percent increase originally reported for the previous month.

Excluding a drop in auto sales, retail sales surged up by 1.0 percent in July following a revised 0.3 percent increase in June. Ex-auto sales had been expected to climb by 0.4 percent, matching the growth originally reported for the previous month.

The jump in ex-auto sales partly reflected a 2.8 percent spike in sales by non-store retailers amid Amazon's Prime Day sales.

Adding to the positive sentiment about retail, Walmart (WMT) reported second quarter results that beat analyst estimates on both the top and bottom lines and raised its full-year guidance.

However, the Federal Reserve released a separate report just before the open unexpectedly showing a modest decrease in industrial production in July.

The Fed said industrial production edged down by 0.2 percent in July following a revised 0.2 percent increase in June.

Economists had expected industrial production to rise by 0.2 percent compared to the unchanged reading originally reported for the previous month.

The unexpected drop in production was partly due to a pullback in manufacturing output, which fell by 0.4 percent in July after climbing by 0.6 percent in June.

"The soft July industrial production data show that the manufacturing recession continued into the third quarter," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

He added, "But the latest surveys provide some reason for optimism and, as the retail sales data released earlier today highlight, there is still little evidence that this malaise is spreading to the wider economy."

Separate reports from the New York and Philadelphia Federal Reserves showed continued growth in regional manufacturing activity in August, although the pace of growth in the Philadelphia region slowed from last month.

Meanwhile, the Labor Department released a report showing a bigger than expected increase in first-time claims for U.S. unemployment benefits in the week ended August 10th.

Sector News

Most of the major sectors showed only modest moves during the day, contributing to the lackluster performance by the broader markets.

Interest rate-sensitive utilities stocks showed a strong move to the upside, however, with the Dow Jones Utility Average climbing by 1.3 percent.

Gold and commercial real estate also saw notable strength, driving the NYSE Arca Gold Bugs Index and the Dow Jones U.S. Real Estate Index up by 1.2 percent and 1.1 percent, respectively.

On the other hand, significant weakness was visible among networking stocks, as reflected by the 1.8 percent slump by the NYSE Arca Networking Index.

Networking giant Cisco Systems (CSCO) posted a steep loss after reporting better than expected fiscal fourth quarter earnings but providing disappointing guidance.

Oil service stocks also extended a recent sell-off amid a drop by the price of crude oil, with the Philadelphia Oil Service Index falling by 1.6 percent to an eighteen-year closing low.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index slumped by 1.2 percent, while Hong Kong's Hang Seng Index advanced by 0.8 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the U.K.'s FTSE 100 Index tumbled by 1.1 percent, the German DAX Index slid by 0.7 percent and the French CAC 40 Index fell by 0.3 percent.

In the bond market, treasuries moved notably higher, extending the upward trend seen in recent sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 5.2 basis points to a three-year closing low of 1.529 percent.

Looking Ahead

The economic calendar is relatively light on Friday compared to today's data deluge, although traders are still likely to keep an eye on reports on housing starts and consumer sentiment.

On the earnings front, Applied Materials (AMAT), Dillard's (DDS) and Nvidia (NVDA) are among the companies releasing their quarterly results after the close of today's trading.