US open: Stocks fluctuate as retail sales beat forecasts

US stocks fluctuated on Friday with the Dow Jones Industrial Average set to extend its all-time highs as data showed that domestic retail sales rose by more than expected in October.

Just before 10:00 in New York, the Dow Jones Industrial Average was 2.98 points down at 17,649.91, while the S&P 500 rose 0.55 points to 2,039.80 and the Nasdaq dropped 0.15 points to 4,213.40.

Sales at US retailers rose a seasonally adjusted 0.3% in October, bouncing back from the first decline in eight months and exceeding analysts’ estimates of a 0.2% increase.

Analysts believe that fourth quarter consumption growth could be in the region of 2.5% on an annualised basis.

“This measure includes all the new information that flows into real consumption, which could be around 2.5% annualised in the fourth quarter,” said Paul Diggle, economist at Capital Economics.

“This isn’t big enough to influence third-quarter GDP growth, though. Overall, October’s retail sales numbers bode well for the crucial holiday shopping season.”

Meanwhile, import prices declined further in October, largely because of lower petroleum prices. Headline import prices fell 1.3%, less than consensus estimates of -1.5%, while non-petroleum import prices fell 0.1% month-on-month.

Imported inflation for headline import prices declined 1.8% year-on-year and rose 0.1% for core prices compared to the corresponding period in 2013.

In corporate news, Twitter fell slightly after a near-6% drop in its share price on Thursday after Standard & Poor's gave its debt a 'junk' rating. The agency rated the social media group's recent $1.8bn debt issue as 'BB-'', three notches below investment grade.

Fashion retailer Abercrombie & Fitch retreated after Credit Suisse downgraded the stock from 'outperform' to 'neutral' and almost halved its target price from $53 to $28.

Hertz Global Holdings fell after announcing it that, in addition to 2011 financial statement, it also needs to restate 2012 and 2013 quarterly and annual financial statements.

The dollar rose against the pound, yen and the euro, while gold futures slid to $1,149.20.

Oil prices rebounded after losing over three percentage points on Thursday, with West Texas intermediate crude trading at just under $75 a barrel, while Brent crude was trading at just over $79 a barrel.

The yield on the 10-year US Treasury note rose two basis points to 2.36%, while the 30-year note advanced one basis point to 3.08% and the five-year Treasuries gained three basis points to 1.65%.