The stock markets in the United States declined as data showed that the retail sales climbed, which strengthened speculations that the Federal Reserve could increase interest rates earlier than expected.
The Department of Commerce reported that retail sales climbed 0.6% in August. The agency said Americans increased their spending in automobiles and other products last month.
Charlie Munger: Invert And Use “Disconfirming Evidence”
The Thompson Reuters/University of Michigan consumer sentiment index increased to 84.6% early this month, higher than the estimate of economist polled by Bloomberg.
Mark Luschini, chief investment strategist at Janney Montgomery Scott LLC said, “Today’s retail sales and consumer confidence data fall into the argument of those who believe Fed lift-off date may come soon.”
Luschini added, “The worry is if the Fed has to lift rates sooner rather than later, there’s a question of when, but also what the trajectory of interest-rate increases will be and if it will undermine this sanguine picture of equities as the only game in town.”
On the other hand, Scott Anderson, chief economist at Bank of the West commented, Retail sales were still somewhat weaker in the third quarter, and recent labor market indicators have been somewhat less encouraging in August and September. This may be enough to keep the doves at the Fed in wait-and-see mode.”
• Dow Jones Industrial Average (DJIA)- 16,987.51 (-0.36%)
• S&P 500- 1,985.54 (-0.60%)
• NASDAQ- 4,567.60 (-0.53%)
• Russell 2000- 1,160.70 (-0.99%)
• EURO STOXX 50 Price EUR- 3,235.07 (-0.08%)
• FTSE 100 Index- 6,806.96 (+0.11%)
• Deutsche Borse AG German Stock Index DAX- 9,651.13 (-0.41%)
• Nikkei 225- 15,948.29 (+0.25%)
• Hong Kong Hang Seng Index- 24,595.32 (-0.27%)
• Shanghai Shenzhen CSI 300 Index- 2,438.36 (+0.61%)
Stocks in Focus
The stock price of Conversant Inc (NASDAQ:CNVR) surged more than 30% to $34.79 per share. The company entered an agreement to sell itself to Alliance Data Systems Corporation (NYSE:ADS) for $2.3 billion in cash and stock. The shares of Alliance Data Systems gained more than 2% to $258 per share.
The shares of General Motors Company (NYSE:GM) declined more than 1% to $33.25 per share. The company issued a stop delivery on the 2015 Chevrolet Corvette to consumers due to potential airbag and parking break issues. The automaker said the delivery interruption is an “effort to deal with quality issues quickly and completely.”
Yahoo! Inc. (NASDAQ:YHOO) gained almost 4% to $42.88 per share after Alibaba Group Holding Limited obtained strong demand for its initial public offering in the United States. The Chinese e-commerce giant plans to stop accepting orders, according to people familiar with the situation.