After four straight days of gains, the Dow Jones Industrial Average (DJINDICES: ^DJI ) took a breather today, finishing the session unchanged at 14,865, though it was down all session, at one point by as much as 0.5%. The S&P 500 and Nasdaq both declined slightly.
Disappointing retail sales numbers from March seemed to cool off this week's rally, especially after some strong results from individual retailers yesterday. Sales at the consumer level dropped by 0.4%, its worst performance in nine months, with no expectations of any change, while a separate consumer confidence report also showed poorer results than expected. The combination of federal budget cuts through sequestration and an increase in the payroll tax seems to be weighing on consumer spending habits. The Producer Price Index was also off by 0.6%; however, the core rate, which excludes the volatile food and energy categories, was up 0.2%. While a long-term drop in prices is generally bad for the economy, a short-term decline can help spur consumption. The numbers also indicate that inflation continues to be well under control.
JPMorgan Chase (NYSE: JPM ) finished down 0.6% after reporting earnings this morning. A slowdown in lending hampered the nation's No. 1 bank by assets, as well as rival Wells Fargo (NYSE: WFC ) , which also reported earnings this morning. Both banks topped earnings estimates, but did so on cost-cutting rather than strong revenue growth. Wells delivered EPS of $0.92, while JPMorgan had an adjusted per-share profit of $1.41.
Home Depot (NYSE: HD ) was today's big winner, gaining 2.4% after its former unit, HD Supply, announced it would go public with a $1-billion IPO. Home Depot remains HD Supply's biggest customer, and the IPO seems to confirm investor belief in the continued recovery of the housing sector. The home-improvement specialist also received an upgrade from Jeffries Group to "buy," from "hold," after the investment research firm said that increasing housing prices and conservative guidance could provide strong upside potential in the stock.
McDonald's (NYSE: MCD ) was another strong gainer, moving up 1.6% after bringing back Steve Easterbrook as Chief Global Brand Officer. Easterbrook had formerly overseen McDonald's Europe, the Golden Arches' biggest region, with 7,000 restaurants in 39 countries. The fast-food chain also tripled the pay for its former and current CEO, and was also receiving some negative publicity after an ad in Massachusetts came out that seemed to associate eating Big Macs with mental illness and depression. McDonald's immediately pulled the ad.
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