Investors received a mix of good and bad news this week on both the economic and corporate earnings front. Retail sales fell less than expected in September and banks, such as Goldman Sachs (NYSE: GS) and JP Morgan (NYSE: JPM) blew-out earnings estimates. However, Bank of America (NYSE: BAC) fell short, while Citigroup (NYSE: C) posted a quarterly loss and Michigan Sentiment slipped for October thus far.
The U.S. Census Bureau reported on Wednesday that September retail sales dipped 1.5 percent for the month, a milder decline than the 2.1 percent drop economists had expected.
The drop was mainly due to a sharp fall-off in auto sales. Excluding that segment, retail sales were up 0.5 percent for the month. The aftermath of the government’s “cash for clunkers” program was evident with auto sales tumbling 11 percent in September compared to August.
The Labor Department reported positive news on the job market as continuing unemployment claims slipped below 6 million for the first time this year to 5.99 million. New jobless claims were also better than expected for the week ended October 10, totaling 514,000, down from 524,000 in the prior week.
In corporate news, Goldman Sachs reported third quarter earnings on Thursday that blew away estimates. The bank earned $3.03 billion or $5.25 a share, while estimates were for $4.24 a share.
JP Morgan saw similar results, earnings $3.59 billion or 82 cents a share as investment banking and stock underwriting business was strong.
Bank of America was not as fortunate, as earnings slipped 5.5 percent, but still totaled $3.22 billion or 33 cents a share. The result fell short of estimates and was down from 72 cents a share last year as losses on credit card defaults and bad home loans jumped for the period.
Michigan Consumer Sentiment Survey, which will certainly be impacted in the second half of October by banking earnings, fell to 69.4 for the first half of October after being as high as 73.5 in September.
