Citigroup lifts market despite decline in retail
ASURPRISE decline in June retail sales was the latest worrying sign from the economy, pushing stocks slightly lower yesterday, but Citigroup earnings limited losses in another forecast-beating report from a bank.
The S&P 500 has fallen in seven of the last eight sessions, weighed down by concerns about the economy. Still, in a sign of resilience, the index is up roughly seven per cent from a low hit early in June despite the worsening economic data.
The drop in retail sales in June, the third consecutive monthly decrease, contrasted with economists’ expectations for a small increase and was the latest sign the recovery is flagging, a major concern for investors.
Shares of Citigroup gained around one per cent after the third largest US bank reported profit that came in above analysts’ estimates. That was despite a 12 per cent drop in quarterly earnings due to losses from credit crisis-era assets.
Citigroup earnings follow results from JP Morgan Chase on Friday that sparked a rally and broke a six-day streak of losses by the Dow industrials.
The Dow Jones industrial average dropped 28.65 points, or 0.22 per cent, to 12,748.44.
The Standard & Poor’s 500 Index fell 1.63 points, or 0.12 per cent, to 1,355.15. The Nasdaq Composite Index dropped 7.42 points, or 0.26 per cent, to 2,901.05.
“Three months in a row of lower retail sales is pretty concerning. People are going to have to lower their GDP estimates,” said Paul Zemsky, of ING Investment Management in New York. “Given that, I’m surprised the market is holding so well.”