Friday was another mostly listless day for equities, as the major benchmarks spent much of the session searching for direction only to find little of it on a sluggish, light volume day in advance of a long weekend.
- The S&P 500 gained 0.18%.
- The Dow Jones Industrial Average slipped 0.08%.
- The Nasdaq Composite added 0.20%.
- On light news, International Business Machines (NYSE:IBM) was the worst-performing name in the Dow Jones today. It appears to be a “heat check” kind of day after the stock’s recent rally.
A stumbling block for broader benchmarks today was investors’ preference for defensive sectors, also known as safe havens, such as real estate and utilities. Those are two of the smallest sector weights in the S&P 500 and the Dow features no exposure to those groups.
The Commerce Department said today that retail sales increased 0.3% last month, while the December reading was revised down to 0.2% from 0.3%.
“Sales at building material stores jumped 2.1%, the most since last August, after rising 1.3% in December. Sales were likely boosted by unseasonably mild weather,” according to CNBC.
And there is the explanation for Home Depot (NYSE:HD) being one of the better names in the Dow today, though that’s not saying much because in late trading, just 12 Dow stocks were higher and only one, Visa (NYSE:V), was up more than 1%.
Legal Wranglings
Nike (NYSE:NKE) inched up in late trading. Infamous lawyer Michael Avenatti was found guilty of three extortion charges involving the company. He supposedly had evidence that Nike paid amateur basketball players and used that as leverage in attempt to get cash out of Nike.
Nike, rightfully so, fought Avenatti the right way — in a court of law — and emerged victorious. In other news, the company’s newest self-lacing sneaker debuts at some retailers this weekend.
Love Is in the Air
I’ll take a leap of faith and assume that nearly everyone reading this knows today is Valentine’s Day. While the retail implications of this particular “holiday” aren’t on par with Christmas, it’s still worth noting that the National Retail Federation (NRF) is forecasting a 32% jump in spending for the February holiday.
Walmart (NYSE:WMT) and Walgreens (NASDAQ:WBA) would be the Dow components with decent leverage to the Valentine’s theme. Speaking of Walmart, the largest U.S. retailer reports quarterly results next Tuesday.
More Legal News
Johnson & Johnson (NYSE:JNJ) was among the Dow losers today, albeit in modest fashion, on news that 21 states, Puerto Rico and Washington, DC, are rejecting an $18 billion settlement offer from opioid wholesalers.
The issue for JNJ here isn’t so much about the dollar figure the company is on the hook for (it’s an amount it can easily afford). It’s more about how long these headlines are going to be an overhang for the company.
Bottom Line on the Dow Jones Today
Friday was the type of choppy day seasoned investors know to expect when a long weekend is looming and with the new coronavirus from China issue far from being put to rest, some equity market lethargy is to be expected.
Although there are just four trading days next week (markets are closed Monday), there is the potential for some sector-specific volatility with Walmart’s earnings report and the Feb. 19 Democratic debate (healthcare).
As of this writing, Todd Shriber did not own any of the aforementioned securities. He has been an InvestorPlace contributor since 2014.