Stocks and exchange traded funds (ETFs) opened the morning relatively flat as positive news regarding unemployment numbers canceled out the effects of a mixed retail report.
The International Council of Shopping Centers and Goldman Sachs reported that sales at established stores fell 2.1% in August from a year ago, beating analysts’ expectations of a drop of 3.5% to 4%. It still indicates that consumers are holding onto their wallets. Nearly half of the retailers reporting beat expectations, while the other half nearly missed them. Those that outperformed were primarily discount retailers. The news sent the SPDR S&P Retail (XRT) up 1.7% in morning trading.
On the employment front, the Labor Department reported that new jobless claims dipped less than expected. The number of unemployed workers applying for unemployment benefits dropped to 570,000 last week from a revised 574,000 the week before, but higher than the 560,000 forecast by economists. Additionally, the total number of Americans receiving unemployment benefits jumped to 6.23 million.
In other news, the U.S. service sector gained some ground as the Institute of Supply Chain Management said its service index rose to a 48.4 from a 46.4 in July. While it was the best reading in 11 months and beat analysts’ expectations, it still indicates the sector is shrinking.
In commodities news, gold climbed to a three-month high as the U.S. dollar weakened and investors grew a bit more uncertain of where the equity markets are going. The precious metal rose to $982.50/ounce in the London markets and further pushed the SPDR Gold Trust (GLD) up 1% in morning trading.
By late morning, all three major U.S. indexes were in positive territory as the Dow Jones Industrial Average gained 0.2%, the S&P 500 added 0.3% and the Nasdaq jumped 0.2%.
For more stories on gold, visit our gold category.
Kevin Grewal contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.