US close: S&P 500 edges higher for the week despite slide in earnings forecasts

The Dow Jones Industrial Average fell 0.20% to 18,576.47 points, the S&P 500 dropped 0.08% to 2,184.05 points and the Nasdaq edged higher by 0.09% to 5,232.89 points.

As the earnings season neared its end, Bloomberg reported that 78% of S&P 500 firms had beat profit forecasts and 56% estimates for sales, with analysts now estimating that earnings dropped 2.5% in the second quarter.

To take note of, estimates for the third quarter were now pointing to a 0.8% drop in S&P 500 profits, versus projections for a rise of 1.8% when the earnings season kicked off four week before.

Wall Street´s benchmark S&P 500 finished the week with a gain of less than 0.1%.

Retail sales in the US were unchanged from the previous month, down from a 0.6% increase in June and missing expectations for a 0.4% gain, the Commerce Department revealed.

Core retail sales – which exclude auto sales – declined 0.3% following a 0.7% increase in June, marking the worst reading since January and falling short of expectations for a 0.2% advance.

Friday's news on the economic front saw yields on benchmark 10-year US Treasuries drop by five basis points to 1.512% and odds of a Fed rate increase in December fall back to 40.6%, versus 44.9% in the previous session.

Peter Read, co-founder of app-only trading network Pelican, said: “Fed Chair Janet Yellen will be disappointed to not be able to add today’s retail sales data to the body of evidence she is building that supports raising interest rates later in the year.

“The possible intervention on rates received a notable backer in San Francisco Fed chief John Williams this week, which comes off the back of a second successive better than expected non-farm payroll result last week.”

In a separate report, the Labor Department said its producer price index for final demand declined 0.4% in July compared to a 0.5% increase in June and analysts’ expectations for a 0.1% rise. It marked the first decline since March and the largest since September 2015.

The University of Michigan’s consumer confidence index also missed forecasts. The preliminary reading for August came in at 90.4, up from 90 the previous month but below estimates for 91.5.

Nonetheless, a gauge of consumers´ expectations picked up from a reading of 77.8 at the end of July to 80.3.

Oil prices reversed course to end the sesión on the up. West Texas Intermediate crude increased $1.03 per barrel to $44.49.

In corporate news, Nvidia Corp rallied after the graphics chip maker reported better-than-expected results late on Thursday.

J.C. Penney Co. gained after the retailer reported a second-quarter losses that was narrower than expected.

Nordstrom was another high riser after posting quarterly sales that beat forecasts and raised its profit guidance for the year.

From a sector stand-point, the largest losses among stocks were seen in the following industrial groups: Paper (-3.19%), Iron & Steel (-3.03%) and Coal (-2.98%).