Stocks End Lower, But Off Session Lows
4:08 pm Thursday, September 16th, 2021
Wall Street lost ground on Thursday as unexpectedly robust retail sales data underscored the strength of the U.S. economic recovery, boosting bond yields and prompting a sell-off in market-leading tech stocks.
Briefly, total retail sales unexpectedly increased 0.7% m/m in August (consensus -0.7%), the September Philadelphia Fed Index was much better than expected with a reading of 30.7 (Briefing.com consensus 19.6), and the 4-week moving average for both initial claims and continuing claims continued to decrease.
Potential buyers have been skeptical of buying on the news, reportedly because of the finnicky price action this month and growth-related concerns involving supply chain disruptions, China, and tax proposals. To be fair, retail stocks are seeing some outperformance in response to the retail sales report.
The S&P 500 consumer discretionary sector (+0.1%), where the large retail stocks reside, has emerged into positive territory as the market has come off session lows. The real estate sector (+0.04%) also holds a slim gain, while the other nine sectors trade lower. The energy (-1.1%) and materials (-1.0%) sectors are down about 1.0%.
As for the key technical level, the S&P 500 came within ten points of its 50-day moving average (4434) at its low, which marks the third straight day that the benchmark index has flirted with this level. It’ll be interesting to see if the market can follow through on its rebound effort or if the S&P 500 needs to actually retest it before attracting buyers.
The Dow Jones Transportation Average had been another bright spot today amid strength in airline stocks and Avis Budget (CAR), which was upgraded to Buy from Neutral at BofA Securities. The U.S. Global Jets ETF (JETS 22) is up 1.4%.
Elsewhere, the 10-yr yield is up three basis points to 1.33%, helping provide some support for the bank stocks. The SPDR S&P Bank ETF (KBE) was up 0.2%.
