US stocks climb after retail-sales data trounces expectations

  • US stocks gained on Friday as investors cheered a better-than-expected reading of September retail sales.
  • American retail spending climbed 1.9% last month, more than doubling economist estimates. The reading marks the gauge’s fifth straight increase and a sharp bounce from August’s 0.6% gain.
  • The encouraging economic data offset dwindling odds of a pre-election stimulus deal. Senate Majority Leader Mitch McConnell said Thursday he only plans to bring Senate Republicans’ smaller package to a vote, quashing hopes for Democrats’ larger proposal.
  • Oil futures sank as rising COVID-19 case counts renewed fears of demand weakness. West Texas Intermediate crude fell as much as 1.6%, to $US40.29 per barrel.
  • Watch major indexes update live here.

US equities climbed on Friday after an advance reading of September retail sales showed stronger-than-expected growth.

American retail spending climbed 1.9% last month, handily surpassing the 0.8% estimate from economists surveyed by Bloomberg. The reading marks the fifth straight increase in retail sales since the gauge cratered in April.

The Friday report also marks an acceleration from August’s paltry 0.6% uptick, suggesting the bounceback in consumer spending has more room to run.

Here’s where US indexes stood shortly after the 9:30 a.m. ET market open on Friday:

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The encouraging economic data offset gloomy updates to stimulus negotiations. The White House crept closer to reaching a deal with Democrats on Thursday, with Treasury Secretary Steven Mnuchin saying the administration was willing to accept funding for increased COVID-19 testing.

Yet Senate Majority Leader Mitch McConnell told voters in Kentucky Thursday afternoon that he only plans to bring a smaller bill to a vote, quashing hopes for the $US1.8 trillion to $US2.2 trillion package sought by the White House and Democrats.

Mnuchin indicated that President Donald Trump may approach McConnell and push for the larger deal, according to House Speaker Nancy Pelosi’s deputy chief of staff. With election day on the horizon, investors remain on edge for any hint of stimulus progress.

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Hertz surged after lining up $US1.65 billion in potential financing. The beleaguered car-rental giant has seen its shares trade with outsized volatility through the year amid strong retail trader interest and bankruptcy risk.

Pfizer jumped after announcing it will pursue emergency authorization for its coronavirus vaccine candidate as early as next month. The update suggests a vaccine could be approved for public use before 2021.

Boeing shares gained after its 737 Max model was deemed safe by European regulators.

Spot gold wavered above its $US1,900 per ounce support after climbing as high as $US1,914.06. Treasury yields gained and the US dollar fell slightly against an index of major currencies.

Oil futures dipped as rising COVID-19 cases reignited fears of demand weakness. West Texas Intermediate crude fell as much as 1.6%, to $US40.29 per barrel. Brent crude, oil’s international benchmark, fell 1.8%, to $US42.39 per barrel, at intraday highs.

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