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Wall Street Opens Higher as Retail Sales Fail to Frighten; Dow up 220 Pts

Stock MarketsMay 14, 2021 09:44AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. stock markets surged at the opening on Friday, as a fresh wave of optimism over economic reopening overcame fears of inflation and consequently a withdrawal of monetary stimulus.

Fears of the economy overheating against a backdrop of production bottlenecks and labor shortages appeared to recede after a series of Federal Reserve speakers in the course of the week reiterated that the rise in inflationary pressures - visible in surging commodity prices and April's consumer inflation report - will not last beyond the end of the year. April's retail sales data, which showed a clear cooling off of consumer spending on stuff (as opposed to services), bolstered confidence that recent developments are only quirks in a gradual return to normal consumer spending patterns.

By 9:45 AM ET (1345 GMT), the Dow Jones Industrial Average was up 217 points, or 0.6%, at 34,239 points. while the S&P 500 was up 0.8% and the Nasdaq Composite was up 1.0%.

Earlier. the Census Bureau had said that retail sales had stagnated in April, albeit the shortfall relative to expectations was offset by an upward revision to March data that had shown a splurge in spending as stimulus checks of up to $1,400 were distributed across the country. Economists said the slowdown was due largely to more spending being diverted to services and experiences, which are not covered by the retail sales statistics. 

The CPI report and awareness of the rally in commodities has nonetheless had an impact on consumers already. the University of Michigan's consumer sentiment survey for May showed a rise in five-year inflation expectations to over 3% for the first time in over seven years.

One of the biggest gainers in early trade was a beneficiary of such spending, with DoorDash stock rising over 11.5% after the food delivery company reported a tripling of revenue in the quarter through March. The company also raised its guidance for the year. 

However, two more heavily-weighted movers were heading in the other direction: Walt Disney (NYSE:DIS) stock fell 4.6% to its lowest in over three months after the entertainment giant said it added fewer new subscribers to its streaming service Disney+ than expected. Disney is set to be a beneficiary of reopening, which will allow movie theater tickets to rebound and its theme parks and cruise division to resume operations. However, such benefits are still largely in the future.

Additionally, Airbnb (NASDAQ:ABNB) stock fell, but then recovered to be up 1.0% after reporting a wider net loss and indicating that it may struggle to capitalize on the expected resurgence in tourism-related bookings this year due to a shortage of hosts. 

Reopening sentiment has been boosted by the Centers for Disease Control recommending that vaccinated people need not wear masks in a variety of indoor environments from now on. Airline stocks reacted particularly strongly to that move, with American Airlines (NASDAQ:AAL), Delta Air Lines (NYSE:DAL) and United Airlines  (NASDAQ:UAL) stock all gaining between 3% and 4%.

Wall Street Opens Higher as Retail Sales Fail to Frighten; Dow up 220 Pts
 

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Comments (10)
Michael Angelo
Michael Angelo May 14, 2021 11:30AM ET
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Nice to write a comment and being censored. This is not free speech, even not free opinion. BS website.
Stan Smith
Stan Smith May 14, 2021 11:14AM ET
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Over 40K small businesses (a big chunk of GDP) have disappeared forever... Doesn't matter?
Mike Chen
Mike Chen May 14, 2021 10:50AM ET
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Wall Street Opens Higher as Retailers rush to buy more stonks during Bargain Sales Promotion!
Mike Chen
Mike Chen May 14, 2021 10:46AM ET
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US market is fearless! Retailers are mighty mouse!
Stan Smith
Stan Smith May 14, 2021 10:25AM ET
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Inflation doesn't matter, retail sales don't matter, war doesn't matter. Can we have an article on what does matter of is this just MMT full speed ahead?
Jon Bal
Jon Bal May 14, 2021 10:25AM ET
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free money and 0% loans with no income needed matter
Christopher Hardnick
Christopher Hardnick May 14, 2021 10:02AM ET
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We all know the news is the bandage that is wrapped around the eyes of lady justice,blinding the retail trades or the public in general to manipulate the markets to fit the pockets of the wall streeter (banks). If I import/export a 100billion dollars of goods/services its a “reflection” on a timeframe of a certain pair from the country I imported/exported...its about the money...and the news blinds us...or is it an “indicator”? Lets talk
Mark Brovchuk
Mark Brovchuk May 14, 2021 9:55AM ET
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proof news dont matter on market with such fed support
Ominous Owl
Ominous Owl May 14, 2021 9:55AM ET
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The articles are hilarious although sometimes marginally truer than a broken clock.
Dhia Betar
Dhia Betar May 14, 2021 9:55AM ET
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Believe in the lord my friend :)
Jeffrey Armstrong
Jeffrey Armstrong May 14, 2021 9:49AM ET
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the fed is worse than drug dealers getting people hooked on meth. they have investors hooked on their monetary policy. good times on wall street.
Amine Fourali
Amine Fourali May 14, 2021 9:49AM ET
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All kind of bs reasons to explain the pump in the stock market...
Stan Smith
Stan Smith May 14, 2021 9:49AM ET
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and any reason for it to drop...doesn't matter
 
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