US Stock Market Overview – Stocks Close Higher; Retail Sales Disappoints

US stocks whipsawed between negative and positive territory, initially tumbling following a softer than expected retail sales report, released by the Commerce Department ahead of the opening bell. Most sectors in the S&P 500 index were higher, led up by Energy, Utilities bucked the trend. In addition to the weak retail sales report, the Federal Reserve reported a record-setting decline in Industrial production. Surprisingly, the stimulus checks provided to taxpayers, generate a boost in consumer confidence. The US oil rig count declined by another 35-rigs helping to buoy crude oil prices which generated tailwinds for energy shares. Next week the retail sectors will release earnings. Walmart, Target, Home Depot, and Lowes are just a few of the large retail companies that will release financial results next week.

Retail Sales Drop Sharply

Retail sales dropped a record 16.4% in April according to the Commerce Department. Expectations were for a milder decline of 12.3%. This follows an 8.3% in retail sales in March. March figures were revised lower to show a drop of 8.7%. Clothing sales took the biggest hit in April with revenues dropping nearly 79%. Non-store retailers showed a surprising gain. Retail trade overall saw a 15.1% drop from March and a 17.8% slide from April 2019.

Industrial Production Declines

The Federal Reserve reported that US industrial production dropped to a record 11.2% in April. Manufacturing output also posted a record drop of 13.7%  as the production of cars, trucks, and auto parts plummeted more than 70%. Output dropped 6.1% at mines and 0.9% at utilities.

Consumer Sentiment Rises

Surprisingly, US consumer sentiment rose in the early part of May following massive stimulus measures by the US government. The University of Michigan’s consumer sentiment index came in at 73.7 for May. That’s up from 71.8 in April and well above the consensus estimate of 65.