Stocks finished the week on a strong note after a disappointing monthly retail sales report had initially dampened hope for an extension to the prior session's surge.
The S&P 500 rallied 3% on Thursday, but action in the early going suggested that participants were interested in pocketing some of that gain. The worst Advance Retail Sales Report in months provided the excuse. Many had expected a modest increase in May retail sales, but they got a 1.2% drop instead. Sales less autos had also been expected to make a slight increase, but they fell 1.1% in their worst drop in over one year. Stocks got some relief from the preliminary Consumer Confidence Survey for from University of Michigan. The survey exceeded expectations for a reading of 74.5 by improving to a two-year high of 75.5. Business inventory data for April had little impact on trade. As had generally been expected, inventories increased 0.4% for the month. Given the lack of corporate news flow, market participants were left to take their cues from the economic data. However, the conflicting nature of those reports left stocks to trade in a relatively tight range in lackluster fashion for most of the session. The major averages were pushed higher in the final few minutes to settle at session highs, though. The move was likely helped by the light volume, which often makes for more exaggerated swings among stocks. Nonetheless, the Nasdaq netted a gain of more than 1%. That helped it secure weekly gain of just over 1%. For comparison, the S&P 500 tacked on a 2.5% weekly gain and the Dow added a 2.8% weekly gain, even though their gains were moderate this session.
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