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Stocks Fight Retail Negativity


Today's financial recap and tomorrow's financial outlook.

The S&P 500 (INDEXSP:.INX) dropped in the early going courtesy of some ugly retail and economic news, but the bulls fought to earn a partial recovery off the morning decline. (NASDAQ:AMZN) fell 11.0% after its fourth-quarter earnings and revenues fell short of analysts' expectations. The e-commerce powerhouse was widely seen as a winner for the holiday season, so this news was a major disappointment.

Brick-and-mortar retail didn't fare much better as giant Wal-Mart (NYSE:WMT) lowered its fourth-quarter guidance due to the impact from a reduction in food stamp issuance and the recent spate of winter storms. After an initial dip, Wal-Mart gradually rose throughout the day to finish more than $2 off the lows.

On the economic front, December 2013 Personal Income disappointed with a flat month-over-month vs. consensus expectations for a 0.2% gain. On a year-over-year basis, Personal Income fell 0.8%, the second worst showing since 2008, raising concerns about economic growth amidst a streak of data that can be described as mixed at best.

The S&P bottomed early at a low of 1772.26, but managed to finish 10 points higher at 1782.59, an overall decline of 0.65%.

Elsewhere in equities, social media stocks were very strong today, extending Thursday's rally, which was set off by Facebook's (NASDAQ:FB) blockbuster earnings report. On the negative side, biotechs were weak, as was energy.

Google's (NASDAQ:GOOG) earnings fell short of consensus, but traders were happy with its strong revenue growth, sending the stock up 4.0% on the day. Investors also continued cheering news that it was selling its Motorola mobile device unit to Lenovo (OTCMKTS:LNVGY).

In fixed income, US Treasury yields fell 2.5 bps to 2.668% on the day, but like stocks, yields creeped higher throughout the day on profit-taking following the bond market's impressive surge thus far in 2014.

Tomorrow's Financial Outlook

Earnings season will continue on Monday. Big names reporting include Sysco (NYSE:SYY) before the open, and Yum Brands (NYSE:YUM), Hartford Financial (NYSE:HIG), and Anadarko Petroleum (NYSE:APC).

In US economics, the January ISM Index and December 2013 construction spending numbers will be released at 10:00 a.m. EST. At 2:00 p.m., we will see January auto and truck sales data.

Twitter: @Minyanville

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No positions in stocks mentioned.

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