The US markets opened largely unchanged on Friday, buoyed by retail sales data that pointed to continued consumer strength as the market digested hotter-than-expected wholesale inflation, as Wall Street prepared to close another week of gains.
The S&P 500 index gained 0.03%, while the Dow Jones Industrial Average advanced 200 points, or 0.4%. The Nasdaq Composite was down in the start.
A notable boost to the Dow came from UnitedHealth, which surged 11% after Warren Buffett’s Berkshire Hathaway and Michael Burry’s Scion Asset Management disclosed stakes in the insurer during the second quarter.
Retail sales meet expectations
Fresh economic data released on Friday morning showed US retail sales rising 0.5% in July, in line with economists’ forecasts compiled by Dow Jones.
Sales excluding automobiles rose 0.3%, also matching expectations. The figures suggested that consumer spending — a key driver of US economic growth — remains healthy despite mixed inflation signals earlier in the week.
For the week, all three major indices were set to close higher, each gaining more than 1% as of Thursday’s close.
Sentiment earlier in the week was lifted by consumer inflation data that fuelled hopes of a Federal Reserve interest rate cut next month.
However, those expectations were tempered on Thursday after the producer price index (PPI), which gained 0.9% in July, briefly weighed on stocks.
Tom Lee, head of research at Fundstrat Global Advisors, told CNBC the market is likely to view the stronger wholesale inflation reading as temporary. “I don’t think that one data point is enough to change a thesis around the trajectory of inflation,” he noted.
Stock movers
UnitedHealth led gains in the Dow, rallying 11% on Friday and set for its best single-day performance in five years if the advance held.
Berkshire Hathaway revealed a stake worth around $1.6 billion, while prominent investors Michael Burry and David Tepper also disclosed sizable positions in the company.
Among other notable movers, Intel climbed more than 5% following a Bloomberg report that the Trump administration is in discussions to acquire a stake in the chipmaker to support factory construction in Ohio.
The move extended Thursday’s 7% gain.
Applied Materials fell sharply, down roughly 12%, after its fiscal fourth-quarter guidance fell short of analyst expectations, despite earnings and revenue topping forecasts.
Sandisk also dropped nearly 7% after reporting a decline in gross margins to 26.4% from 36.4% a year earlier.
Ulta Beauty and Target also agreed to end their retail partnership.
Elsewhere, Rivian’s shares edged 1.5% higher even after the electric vehicle maker said that changes to US fuel economy standards were delaying $100 million in revenue tied to regulatory credit contracts.
Hims & Hers fell 2.7% amid reports of a Federal Trade Commission investigation into its subscription cancellation practices.
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