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Dow Jones Slips Despite Unexpected Jump In Retail Sales Data; S&P 500 Energy Sector Heads Into Correction

The Dow Jones Industrial Average turned moderately negative in today’s market wrapping up a volatile week of trading. The S&P 500 also traded near its lows of the day while the Nasdaq composite traded back near breakeven. Small caps underperformed with bigger losses.




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On Friday, a new report on retail sales from the Commerce Department showed a surprise gain of 0.6% month-on-month in June. This was a reversal from the 1.7% drop in May and indicates a surprise uptick on the demand side of the economy.

Additionally, Treasury Secretary Janet Yellen warned prices could continue to rise late Thursday on CNBC.

“We will have several more months of rapid inflation,” she told CNBC. “So I’m not saying that this is a one-month phenomenon. But I think over the medium term, we’ll see inflation decline back toward normal levels. But, of course, we have to keep a careful eye on it.”

Dow Jones In The Stock Market Today

At around 1:40pm ET, the Nasdaq held a loss of 0.3%. Meanwhile, the S&P 500 traded 0.3% lower. The Dow Jones industrials fell 0.4%, leading on the downside. The small-cap Russell 2000 index slumped 0.6% on Friday. Volume was running lower on both the NYSE and Nasdaq vs. the same time on Thursday.

Stocks underperforming in the Dow Jones on Friday included financial and energy stocks Chevron (CVX), Goldman Sachs (GS) and JPMorgan (JPM), down 1% or more each.

Meanwhile, Dow Inc. (DOW) declined 2.4% in heavy trade. Shares hit a four-month low on Friday and are close to testing the 200-day moving average.

On the upside, Home Depot (HD) was among top gainers with a rise of 0.4% in midday trading. Shares are building a flat base, according to IBD MarketSmith chart analysis. The stock is roughly 6% away from a 345.79 buy point after regaining its 50-day line during the week.

The Innovator IBD 50 ETF (FFTY) bucked the trend and rose 0.2%, leading the upside. Shares of the ETF are now solidly below the 200-day moving average after a heavy sell off this week. Stocks leading the upside in the index are few, but included Covid-19 vaccine maker Moderna (MRNA).

Moderna surged 9% to a new high of 288.88 Friday morning on news that it will be added to the S&P 500 index. The stock is sharply extended from a cup with handle’s 189.10 buy point.

Shares of Sprout Social, another IBD 50 stock, were trading back inside the 5% buy zone of a cup-base 82.57 buy point. The stock became extended from the buy area in mid-June. Shares triggered a round trip sell signal by falling back into the buy area this week.

Energy Stocks Sell Off

Among the 11 S&P 500 sectors, energy fared the worst on Friday. The Energy Select SPDR ETF (XLE) traded 2.2% lower on Friday and was down more than 8% for the week.

According to Dow Jones Market Data, the S&P 500 energy sector is currently down 11.1% from its recent closing high on June 15 at 420.34. Currently, the sector is on pace to close in correction territory. This would be the third correction in 2021 for the energy sector.

Oil prices, however, moved slightly higher on Friday, after a rough sell-off last week caused by a breakdown in communications between OPEC+ members. West Texas intermediate oil prices gained 0.6% to $72.06 a barrel midday.

Follow Rachel Fox on Twitter at @foxonstocks for more Dow Jones and market commentary.

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