Retail sales extended August’s momentum, however, the CPI index and consumer sentiment disappoint. Stocks and exchange traded funds (ETFs) move lower on the news and on reports from GE.Overall, economists are looking for retail sales to rise for a third straight month in September, helped by a rebound in auto sales. According to Associated Press, economists at JPMorgan Chase are forecasting that retail sales increased 0.6% in September and excluding autos will show a 0.4% rise. Analysts are also looking for a stronger retail sales figure in September, compared to August, because of reports from the nation’s big retail establishments. [Why Retail ETFs Are Holding Strong.]
Annalyn Chensky for CNN Money reports that The Consumer Price Index, a key measure of inflation, rose 1.1% over the last 12 months ending in September, the Bureau of Labor Statistics said Friday, unchanged from the previous month. A rate around 1% suggests slow growth. The possibility of rising inflation had also been a concern amid speculation of further easing of U.S. monetary policy, however, the low CPI reading dissuaded some of those fears.
A preliminary reading of the University of Michigan consumer sentiment index for October fell from 68.2 to 67.9. Economists expected the index to rise.
Worries over the financial sector and a disappointing drop in revenue at General Electric (NYSE: GE) halted an early market rally Friday. Associated Press reports that stocks initially rose after Federal Reserve chairman Ben Bernanke reiterated the central bank is ready to do more to stimulate the sluggish economy. The Dow Jones industrial average plummeted 57 points in morning trading, due to banking sector concerns and a dismal report from GE.
Associated Press reports that GE’s third-quarter income fell 18% because a Japanese finance division required additional cash reserves. The U.S.’ low manufacturing sales have contributed to GE’s loss, as well as low equipment sales.
Tisha Guerrero contributed to this article.
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