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Pre-Market Primer: Stocks Lower as Retail Sales Figures Beat Estimates

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But petroleum sales drove consumer saving last month.

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Stock futures are lower today despite a better-than-expected retail sales report.

Retail sales rose far more than expected in a fourth consecutive month of increased spending. Total retail sales rose 1.1%. Economists predicted a 0.5% rise in sales as consumers adjust to the higher payroll taxes and employers add workers to payrolls. Increased household wealth from higher home prices and a rallying stock market may have also spurred consumption. According to the latest Bureau of Labor Statistics report, retailers added 24,000 new workers. Higher gasoline prices might have held back some consumers from spending. Gasoline sales played a major role in the spending rise. Excluding auto and gas components, retail sales rose 0.4%

Import prices rose1.1% on the month, but fell 0.3% from the year earlier in February. Export prices are up 1.5% from last year, or 0.8% from January.

Major US stock indices were mixed yesterday, and futures point to a weaker opening. After yet another record high yesterday, Dow (INDEXDJX:.DJI) futures fell 0.21% to 14,356. Futures on the S&P 500 (INDEXSP:.INX) sank 0.25% to 1,543.00 and Nasdaq (INDEXNASDAQ:.IXIC) futures declined 0.22% to 2,791.75. Ahead of the Energy Information Administration's report on oil stockpiles, US oil prices rose slightly to $92.64 per barrel. Later this morning, a government report is expected to show that business inventories increased by 0.5% in January after rising just 0.1% in December.

While employers increased hiring and consumers continue to spend, Washington is still stuck on the budget question. Yesterday, the White House came out against Congressman Paul Ryan's budget proposal, saying that it didn't add up. Today, Senate Democrats will release their first budget since 2009.

European stocks declined after the bond market turned against Italy. The country, which still lacks a government, saw its long-term borrowing costs rise at an auction of 3- and 15-year debt. Two billion euros of 15-year bonds sold at 4.9% yield; 3.32 billion in 3-year bonds cost Italy 2.48%. The auction didn't reach its 7.25 billion euro target, indicating that investors are cautious about investing in Italy for the time being.

Eurozone industrial production fell more than expected in January. On a monthly basis, output fell by 0.4%, or 1.3% year-over-year.

Japanese equities declined today under pressure from a strengthened yen. Chinese stocks declined today as some fear that the central bank will scale back monetary stimulus. People's Bank of China governor Zhou Xiaochuan said that he was concerned about inflation, and indicated that policy might need to be tightened.

Boeing (NYSE:BA) won regulatory approval to test a new battery for the troubled 787 Dreamliner.

Oracle (NASDAQ:ORCL) shares advanced after Canaccord Genuity upgraded its rating on the stock to buy from hold. The analyst's price estimate for the shares is $42 in a year.

Twitter: @vincent_trivett
No positions in stocks mentioned.
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