MARKET SNAPSHOT: Stocks Cough Up Records As Retail Sales, PPI Disappoint

By Ellie Ismailidou and Victor Reklaitis, MarketWatch

J.C. Penney sales miss; Treasury yields plunge, with the benchmark 10-year yield at 1.49%

U.S. stocks opened slightly lower Friday, retreating from record levels set a day earlier, when all three main benchmarks closed at all-time highs, as investors grappled with weaker-than-expected retail sales data and an unexpected drop in wholesale prices.

The main indexes were on track to finish the week roughly where they started.

The S&P 500 index gained 4 points, or 0.2%, lower at 2,181, weighed by a 0.6% drop in financial shares, followed by a 0.4% loss in the health-care sector. Three of the index's 10 sectors were in positive territory, with utilities leading the gains, up 0.5%.

The Dow Jones Industrial Average slipped 37 points, or 0.2%, to 18,576, pulled down by a 1% drop in Goldman Sachs Group Inc.(GS) but buoyed by a 0.4% gain in Boeing Co.(BA).

Meanwhile the Nasdaq Composite Index was off 10 points, or 0.2%, at 5,219.

U.S. retail sales stalled in July after three straight monthly gains, according to government data released Friday. (http://www.marketwatch.com/story/retail-sales-stall-in-july-2016-08-12)Retail sales, which have increased 2.3% over the past 12 months, are an important part of consumer spending, which is the backbone of the U.S. economy.

Meanwhile, U.S. wholesale prices fell 0.4% in July, the biggest drop since September 2015, according to a government report released Friday. (http://www.marketwatch.com/story/us-wholesale-prices-fall-sharply-in-july-2016-08-12) (http://www.marketwatch.com/story/us-wholesale-prices-fall-sharply-in-july-2016-08-12)The Producer Price Index was down 0.4% after jumping 0.5% in June, while over the past year overall producer prices are down 0.2% in unadjusted terms.

While stocks turned negative after the release, gold gained, the dollar slumped and Treasury yields plunged to their second-lowest level in history. The weak data are likely to firm the view for some market participants that the economy isn't strong enough to tolerate a rate increase in September, or later in 2016.

"Based on the PPI and retail-sales figures, all indications now look like a [Federal Reserve] rate increase in 2016 is clearly off the table," said Tom di Galoma managing director at Seaport Global Holdings, in an email shortly after the release.

Among individual retailers, J.C. Penney Co. Inc.'s (JCP) shares fell 1.1% after the retailer reported narrower-than-expected second-quarter losses, though sales were just below estimates (http://www.marketwatch.com/story/jc-penney-shares-fall-despite-smaller-second-quarter-losses-2016-08-12). Meanwhile, Nordstrom, Inc. (JWN), shares jumped 6% in early trader after posting better-than-expected sales and raised profit projections for the year (http://www.marketwatch.com/story/nordstrom-profit-tops-view-as-revenue-declines-2016-08-11).

(END) Dow Jones Newswires

August 12, 2016 09:50 ET (13:50 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.