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Stock futures pared some losses Thursday morning after a stronger-than-expected report on retail sales, suggesting consumer spending held up despite concerns over the Delta variant.
Contracts on the S&P 500 moved a tick below the flat line, and each of the Dow and Nasdaq also tracked toward lower opens.
Traders considered a key set of economic data, which showed an unexpected rise in spending last month even as the latest wave of the coronavirus spread across the U.S. The Commerce Department's August retail sales report showed overall sales rose by 0.7% on the month after a downwardly revised 1.8% drop in July. Consensus economists were looking for a 0.7% drop, according to Bloomberg data.
The latest data served as another indicator of the relative strength in economic activity after an initial reopening surge in late spring and summer. While many economists have agreed the overall trend is of decelerating growth, the actual extent of the deceleration remains to be seen.
This uncertainty has also left equity investors closely monitoring the incoming data for signals of how the economic backdrop could impact the earnings picture for major companies. Amid concerns including the Delta variant, ongoing supply chain constraints, labor shortages and a potential policy pivot by the Federal Reserve, the S&P 500 has so far fallen 0.9% in September.
"Equity markets have been positive for seven consecutive months, which is quite rare ... So yes, investors are rightly concerned," Akshata Bailkeri, Bruderman Asset Management equity analyst, told Yahoo Finance. "But the the reason why we're seeing this is because these earnings behind a lot of these companies are continuing to grow, and that's really what's driving these index values higher."
As FactSet pointed out in its latest weekly report, consensus analysts are still looking for S&P 500 earnings growth of nearly 28% for the third quarter. While a deceleration from the more than 80% growth rate posted in the second quarter of this year, that would still mark the third-highest year-over-year increase in earnings for the index since 2010. Third-quarter earnings reporting season is set to pick up next month.