Stocks May Open Lower On Disappointing Retail Sales Data

Following the mixed performance seen in the previous session, stocks may move to the downside in early trading on Friday. The major index futures are currently pointing to a modestly lower open for the markets, with the Dow futures down by 11 points.

Negative sentiment may be generated in reaction to a report from the Commerce Department showing an unexpected drop in retail sales in the month of August.

The report said retail sales dipped by 0.2 percent in August after rising by a downwardly revised 0.3 percent in July.

Economists had expected retail sales to inch up by 0.1 percent compared to the 0.6 percent increase originally reported for the previous month.

Excluding a slump in auto sales, retail sales rose by 0.2 percent in August after climbing by 0.4 percent in July. Ex-auto sales had been expected to increase by 0.5 percent.

Meanwhile, the New York Federal Reserve released a separate report showing a modest slowdown in the pace of growth in regional manufacturing activity in the month of September.

The New York Fed said its general business conditions index edged down to 24.4 in September from 25.2 in August, although a positive reading still indicates growth. The index has been expected to drop to 19.0.

Shortly before the start of trading, the Federal Reserve is scheduled to release its report on industrial production in the month of August.

Economists expect industrial production to inch up by 0.1 percent in August after rising by 0.2 percent in July.

Reports on consumer sentiment in September and business inventories in July are also due to be released shortly after the start of trading.

Geopolitical concerns may also weigh on the markets on news North Korea launched an unidentified missile over Japan and into the Pacific Ocean.

Secretary of State Rex Tillerson said continued provocations would only deepen North Korea’s diplomatic and economic isolation.

After moving in opposite directions early in the session, the major averages remained mixed throughout the…

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