Stocks Weighed Down by Disappointing Retail Sales and Consumer Confidence

Disappointing retail sales and consumer confidence figures have thrown a wrench in the market's rally today. As of 2:45 p.m. EDT, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is off by 29 points, or 0.19%.

Earlier today, the Department of Commerce released figures for nationwide March retail sales (link opens PDF). The data showed that Americans spent 0.4% less last month, marking the largest decline in nine months. Economists surveyed by Bloomberg had expected no change in the reading.

In other bad news, the University of Michigan Consumer Sentiment Index dropped to 72.3 in its preliminary April reading. That's the lowest level since July and well below the consensus forecast of 79.3. According to an economist quoted by MarketWatch.com, "People presumably are responding to the news the Congress chose to implement the sequester; the cash-flow drain imposed by the payroll tax increase can't be helping either."

On the individual-company front, two of the nation's largest banks reported first-quarter earnings today. Net income at JPMorgan Chase (NYSE: JPM  ) increased by an impressive 33%, and the bank originated 37% more mortgages than it did in the same quarter of last year. As my colleague John Grgurich put it, "Quarter after quarter, JPMorgan continues to perform at the highest level, even given continuing challenging economic conditions and an already softening mortgage market."

And Wells Fargo (NYSE: WFC  ) similarly reported stellar results. For the quarter, it earned $5.2 billion, the highest quarterly profit in the bank's history. It also underwrote a staggering $109 billion in mortgages -- though this was down on both a year-over-year basis and a sequential basis. As Wells Fargo's CFO observed in prepared remarks (link opens PDF), "This is our 13th consecutive quarter of EPS growth and 8th consecutive quarter of record EPS."

The best-performing stock on the Dow today is home improvement Home Depot (NYSE: HD  ) , which is up 2.2% after an analyst at Jefferies upgraded the stock from hold to buy. He also slapped an $85 price target on it; the shares currently trade for $73.

Alternatively, the worst-performing stock on the blue-chip index is Alcoa (NYSE: AA  ) . The aluminum giant kicked first-quarter earnings season off earlier this week by beating analyst estimates on the bottom line but coming up short on the top line. However, today's performance is likely more of a reflection on the seemingly deteriorating state of the American consumer.

Materials industries are traditionally known for their high barriers to entry, and the aluminum industry is no exception. Controlling about 15% of global production in this highly consolidated industry, Alcoa is in prime position to take advantage of growth that some expect will lead to total industry revenue approaching $160 billion by 2017. Based on this prospect and several other company-specific factors, Alcoa is certainly worth a closer look. For a Foolish investment perspective on this global giant, simply click here now to get started.


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