S&P 500 flirts with record as strong retail sales bolster growth

US stocks drifted higher on Thursday to trade near fresh all-time highs as retail sales rebounded in June, easing concerns about a slowdown in consumer spending.

The S&P 500 Index was up 0.2% as of 9:40 a.m. in New York, leaving it less than 0.1% from a record. The Nasdaq 100 Index rose 0.2%, after notching a new all-time high a day earlier. Gains were kept in check as a basket tracking so-called Magnificent Seven stocks including Apple Inc., Alphabet Inc. and Meta Platforms Inc. was flat. Nvidia Corp. rose just 0.1%. Treasury yields are little changed and the dollar rose.

Among individual stocks, PepsiCo Inc. climbed 6.4% after maintaining its annual outlook and reporting sales growth that beat Wall Street estimates, citing strong international growth. And Archer-Daniels-Midland fell 1.5% after President Donald Trump said Coca-Cola has agreed to use “real cane sugar” in Coke soda in the US. Coca-Cola rose 0.7%.

The value of retail purchases, not adjusted for inflation, increased 0.6% in June after declines in the prior two months, Commerce Department data showed Thursday. That exceeded nearly all estimates in a Bloomberg survey of economists. Excluding cars, sales climbed 0.5%. That reinforced speculation the Federal Reserve will stay on hold for now. Fed Governor Adriana Kugler said the central bank should keep holding rates steady “for some time.”

“The death of the consumer has been greatly exaggerated, as a blowout retail sales number shows that consumers are still spending and are keeping the economy growing,” wrote Chris Zaccarelli, chief investment officer at Northlight Asset Management. 

With the Fed entering a blackout period this weekend before its July 30 interest-rate decision, money managers are wrestling with what could break the S&P 500 out of its recent narrow range. The index has gone seven sessions through Wednesday without a move exceeding 0.61% in either direction, according to data compiled by Bloomberg.

Of note, United Airlines rose 5.7% after the carrier narrowed its profit range for this year, saying the outlook has become more predictable than in the first six months, a period punctuated by flight disruptions, trade tensions and fighting in the Middle East. Delta Air Lines Inc. and American Airlines Group Inc. rose 2% and 4.4%, respectively.

Meantime, General Electric Co. edged up 0.4% after the company boosted its full-year financial guidance and topped Wall Street’s profit estimates for the second quarter as rebounding demand in the aviation market softened the impact of a global trade war.

Elsewhere, Sarepta Therapeutics soared 18% after the company said it was cutting more than a third of its workforce and that its gene therapy for a fatal muscle disorder would stay on the market with warnings about the potential for liver failure.

After the closing bell, Netflix Inc. is expected to see “solid” revenue gains of 16% on price hikes in key markets including the US and France, as well as more advertising, according to Bloomberg Intelligence — which could prompt the company to raise guidance. A strong slate of releases for the second half should drive subscriber growth and engagement for the rest of the year, BI said. 

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