Stocks traded along the flatline on Friday as Wall Street digested the release of disappointing consumer data and strong earnings to end a solid week of gains.
Core retail sales, which exclude autos, gas, building materials and food services, were unchanged last month, the Commerce Department said. The department added clothing-store sales had their biggest one-month decline since 2009.
The data suggests “consumer spending is still struggling for momentum,” said Andrew Hunter, senior U.S. economist at Capital Economics, in a note. “That may also have been affected by the unseasonable weather, but there were also declines in electronics and health & personal care, while online sales continued their relatively subdued run.”
Concerns over the weak data were partially offset as Nvidia led a number of companies in reporting better-than-expected earnings.
Traders work on the floor of the New York Stock Exchange (NYSE) on January 10, 2020 in New York City.
Kena Betancur | Getty Images
Nvidia shares rose more than 6% after its quarterly results beat analyst expectations. Expedia got an 11.6% boost from its earnings while Roku gained 6.1%.
More than 77% of S&P 500 companies have reported earnings thus far, with roughly 72% of them beating analyst expectations, FactSet data shows.
“We’re looking now at a very modest positive quarter for the fourth quarter,” said Jon Adams, investment strategist at BMO Global Asset Management. “If we do see earnings growth pick up here, which we think it will throughout 2020, that will bode well for U.S. equities.”
Wall Street is headed for strong weekly gains even as investors grapple with a rising number of reported coronavirus cases. The S&P 500 and Dow are each up more than 1% for the week through Thursday’s close. The Nasdaq, meanwhile, has risen 2%.
China’s National Health Commission on Friday reported an additional 121 deaths nationwide, with 5,090 new confirmed cases of the coronavirus. The flu-like virus was found to have killed a total of 1,380 people in mainland China as of Thursday evening after the health commission said it had removed 108 deaths from the total figure due to a double-count in Hubei province — the epicenter of the global coronavirus outbreak.
It is the second day in a row that the province’s data changes have caused significant changes to a nationwide figure, fueling doubts many have about their accuracy.
“The recovery looks rational, although it may appear early,” Timothy Moe, chief Asia Pacific regional equity strategist, said in a note. “To the extent that investors are looking at equity market performance after previous virus outbreak episodes as a template for current potential performance, the current macro environment does not appear as supportive for equities.”
—CNBC’s Sam Meredith contributed to this report.