NVDA NVIDIA Corporation

By Ellie Ismailidou and Barbara Kollmeyer, MarketWatch

J.C. Penney, Nordstrom tumble on weak earnings

U.S. stock futures pared their losses Friday, following news that sales at U.S. retailers jumped 1.3% in April to mark the biggest gain in a year.

After briefly flirting with positive territory, stock futures remained in the red ahead of the opening bell, as a fresh drop in oil prices curbed investors' risk appetite.

Dow Jones Industrial Average futures fell 49 points, or 0.2%, to 17,624, while futures for the S&P 500 were down 4 points, or 0.2%, to 2,055. Nasdaq-100 futures lost 4 points, or 0.1%, to 4,330.

Auto dealers, gas stations and online vendors spearheaded the increase in retail sales, which exceeded economists' expectations of an 1% rise. (http://www.marketwatch.com/story/retail-sales-leap-13-in-april-2016-05-13)

Meanwhile U.S. producer prices rose 0.2% in April (http://www.marketwatch.com/story/us-producer-prices-climb-02-in-april-2016-05-13) after two straight declines, but inflation at the wholesale level remained largely absent in the broader economy.

Investors welcomed the strong retail-sales reading after a flurry of disappointing news in that sector this week, due to which on Friday ahead of the opening bell the consumer-discretionary sector, which mainly includes retailers, was the only S&P 500 sector on track for a weekly loss.

The dollar and U.S. stocks took a hit on Wednesday after U.S. retailers such as Macy's Inc.(M) and Kohl's Corp.(KSS) delivered weaker earnings reports and downgraded 2016 forecasts. But on Friday, the dollar (http://www.marketwatch.com/story/dollar-slips-as-market-looks-ahead-to-next-weeks-g-7-2016-05-13) gained against the yen and the euro following the strong data.

"We have quite the contradiction between what many U.S. retailers said this week about the macro landscape and today's April retail sales figure," said Peter Boockvar, chief market analyst at The Lindsey Group, in emailed comments.

According to Boockvar, the discrepancy points to a story of "shifting channels" rather than slowing sales, as the numbers showed "quite a difference between online and department stores" which the core rate of sales improved year-over-year to its best reading since July.

Also weighing on risk appetite was the fact that crude oil prices (http://www.marketwatch.com/story/oil-price-rally-fades-as-oversupply-fears-crop-up-again-2016-05-13) moved lower, with West Texas Intermediate down 1.5%, after comments from Russian Energy Minister Alexander Novak drew attention. He told reporters on Thursday he doesn't see the oil market balancing out until the first half of 2017, Reuters reported.

Oil prices rallied Thursday after an International Energy Agency report said declines in global production will ease a crude supply glut. A reading on North America's oil-rig count is expected Friday afternoon.

Overall, this week has been muted for stocks. With one session left to go, the Dow industrials are down 0.1%, and the S&P 500 is up just 0.3%. The Nasdaq Composite is flat.

The Dow industrials barely eked out a gain on Thursday (http://www.marketwatch.com/story/us-stocks-look-set-to-recover-from-corporate-bruising-2016-05-12), and the S&P 500 finished flat. Equities were prevented from making gains largely due to a steep slide in Apple Inc.(AAPL) and other technology shares. A biotech selloff also weighed on the Nasdaq Composite .

"The lack of catalysts this week have left investors without any direction. I don't think this is helped by a number of assets currently being at elevated levels, oil and U.S. equities to name just a couple," said Craig Erlam, senior market analyst at Oanda, in emailed comments.

Economic data: The University of Michigan's consumer sentiment index for May, due for release at 10 a.m. Eastern, alongside business inventories for March.

Fed speak: Comments from Fed Chairwoman Janet Yellen could draw some attention. In a letter to Rep. Brad Sherman (D., Calif.) (http://www.marketwatch.com/story/feds-yellen-says-negative-rates-would-need-careful-consideration-2016-05-13) released by his office on Thursday, she said the central bank wouldn't rule out using negative interest rates, but such a move would require careful consideration.

San Francisco Fed President John Williams will speak to the Sacramento Economic Forum in Sacramento, Calif., at 6:25 p.m. Eastern Time.

Stocks to watch:J.C. Penney Co. Inc.(JCP) tumbled 9.3% before the bell after the company missed quarterly sales estimates (http://www.marketwatch.com/story/jc-penney-shares-tumble-after-weak-sales-fall-short-of-estimates-2016-05-13) as same-store sales fell way below expectations.

Nordstrom Inc.(JWN) shares plunged 14.5% after the retailer reported lower-than-expected first-quarter sales (http://www.marketwatch.com/story/nordstrom-shares-plunge-after-revenue-eps-miss-2016-05-12) and earnings.

Nvidia Corp shares climbed 10.2% after the company's profit rose 46% in the latest quarter as the chip maker saw strong growth (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=8&cad=rja&uact=8&ved=0ahUKEwj_q-v3gtfMAhWC4yYKHd2RA3oQqQIIMTAH&url=http%3A%2F%2Fwww.marketwatch.com%2Fstory%2Fnvidia-shares-rally-5-after-earnings-outlook-top-street-view-2016-05-12&usg=AFQjCNHU-3P5jnI19CcJkml2qm_KcG_TpQ&bvm=bv.122129774,d.eWE) in gaming products as well as newer sectors like automotive "infotainment."

Shake Shack Inc.(SHAK) shares gained 6% premarket after the company swung to a better-than-expected profit for its first quarter, boosted by strong same-store sales (http://www.marketwatch.com/story/shake-shacks-strong-same-store-sales-boost-profit-2016-05-12) and new location openings, leading the chain to raise its annual guidance.

Apple will invest $1 billion in Didi Chuxing Technology Co., China's homegrown competitor to Uber Technologies Inc., the iPhone maker announced late Thursday (http://www.marketwatch.com/story/apple-puts-1-billion-into-chinas-uber-rival-didi-2016-05-13).

U.S.-listed shares of Royal Dutch Shell PLC(RDSB.LN) (RDSB.LN) (RDSB.LN) (RDSB.LN) could be active. Shares fell in London after an estimated 2,100 barrels of crude leaked from a Royal Dutch Shell facility in the Gulf of Mexico Thursday (http://www.marketwatch.com/story/shell-shuts-well-after-leak-into-gulf-of-mexico-2016-05-12).

Other markets: Asian markets (http://www.marketwatch.com/story/oil-volatility-unsettles-asian-markets-nikkei-set-for-around-2-weekly-gain-2016-05-13) finished Friday lower, with markets rattled by oil-price volatility. The Nikkei 225 index dropped 1.4%, though it finished the week nearly 2% higher. The Shanghai Composite Index lost 0.3% on the day, but posted a nearly 3% drop for the week.

European stocks were mixed (http://www.marketwatch.com/story/european-shares-push-lower-heading-for-third-straight-weekly-drop-2016-05-13) after a rough week on the earnings front. Gold prices fell 0.4% to $1,265.8 an ounce.

Read: Investors' appetite for gold is soaring, and there is little sign of a slowdown (http://www.marketwatch.com/story/investor-appetite-for-gold-is-soaring-and-theres-little-sign-of-a-slowdown-2016-05-12)

(END) Dow Jones Newswires

May 13, 2016 09:13 ET (13:13 GMT)

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