MARKET SNAPSHOT: Stock Market Set To Climb After Lackluster Inflation, Retail Sales

By Mark DeCambre and Carla Mozee, MarketWatch Features Dow Jones Newswires

Bank of America logs profit rise; Wells Fargo disappoints on mortgage-related charges

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U.S. stock benchmarks were poised to rise Friday, after readings on consumer inflation and retail sales came in slightly weaker than expected, offering support to those who believe that the Federal Reserve may more gradually increase interest rates amid tepid price increases and wage growth. Investors also watched the latest earnings from big banks, viewed as a proxy for the health of the overall economy.

Read:The S&P 500 is poised to make stock-market history--for doing almost nothing (http://www.marketwatch.com/story/sp-500-is-poised-to-make-uncanny-stock-market-historyfor-doing-almost-nothing-2017-10-12)

What are the main benchmarks doing?

Futures for the Dow Jones Industrial Average picked up 30 points, or 0.1%, to 22,829. S&P 500 futures tacked on 5 points, or 0.2%, at 2,554.75. Nasdaq-100 futures edged up 20.75 points, or 0.4%, to 6,096.

All three indexes closed lower on Thursday (http://www.marketwatch.com/story/us-stock-indicators-ease-from-record-highs-as-bank-earnings-arrive-2017-10-12), retreating from records set in the previous session. The Dow industrials ended down 0.1%, while the S&P 500 and the Nasdaq both lost 0.2%.

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For the week, gains appeared modest for all three benchmarks as of the close Thursday. The Dow industrials was headed for a 0.3% rise, while the S&P 500 teetered around a 0.1% increase. Both have risen for five straight weeks. The Nasdaq was looking at a gain of just about 2 points, but that would be enough to mark a third consecutively weekly win.

Thus far in 2017, the Dow has gained nearly 16%, the S&P is up 14%, and the Nasdaq has risen 22%.

See: Howard Gold on 5 things to do when every investment is too expensive (http://www.marketwatch.com/story/five-things-to-do-when-every-investment-is-too-expensive-2017-10-12)

What is driving markets?

The consumer-price index rose 0.5% in September, the second increase in a row and the largest in eight months. However, economists polled by MarketWatch had forecast a 0.6%. Stripping out volatile food and energy costs, core CPI rose at a much smaller 0.1% rate.

Inflation readings are weighed for their likely influence whether the Federal Reserve will raise interest rates in December (http://www.marketwatch.com/story/fed-officials-disagree-on-need-for-interest-rate-hike-in-december-2017-10-12).

A reading sales showed a rise of 1.6% in September, reflecting the largest increase in 2 1/2 years, coming in line with Wall Street expectations.

Meanwhile, the Trump administration said late Thursday it will end billions of dollars in subsidies to insurers (http://www.marketwatch.com/story/trump-to-halt-obamacare-subsidies-to-health-insurers-2017-10-13) under the Affordable Care Act program. The White House said the government can't lawfully make the payments as there is no appropriation for them.

Read:How to invest in health-care stocks regardless of what happens in Washington, D.C (http://www.marketwatch.com/story/how-to-invest-in-health-care-stocks-regardless-of-what-happens-in-washington-dc-2017-10-13).

What data are ahead?

10 a.m. Eastern

Reports on consumer sentiment in October and business inventories in August are due at 10 a.m. Eastern.

Check out:MarketWatch's Economic Calendar (http://www.marketwatch.com/economy-politics/calendars/economic)

Which Fed speakers are ahead?

Meanwhile, Chicago Fed President Charles Evans is due to give a speech on the economy at 10:25 a.m. Eastern, appearing at a financial literacy event in Green Bay, Wis.

Dallas Fed President Robert Kaplan is expected to take part in a moderated discussion (https://www.cfainstitute.org/learning/events/Pages/10122017_134634.aspx) at 11:30 a.m. Eastern, at the CFA Institute's 2017 fixed-income management conference in Boston.

What are strategists saying?

"Today's U.S. CPI and retail sales figures will be the key event of the day, as investors wait to see whether the data aligns with the more dovish views of some Federal Open Market Committee members," said Chris Beauchamp, chief market analyst at IG, in a note.

"And after J.P. Morgan and Citigroup beat estimates yesterday, we will wait to see if Bank of America can repeat the trick," he said.

Which stocks look like key movers?

Bank of America Corp.(BAC) shares rose 1% premarket after the lender posted a rise in third-quarter profit (http://www.marketwatch.com/story/bank-of-america-profit-climbs-but-trading-slumps-2017-10-13).

Wells Fargo & Co.(WFC) shares declined in premarket trade after it reported third-quarter earnings that were weaker than expected (http://www.marketwatch.com/story/wells-fargo-stock-slides-after-tepid-growth-legal-costs-weigh-on-earnings-2017-10-13), with a profit of $4.6 billion, or 84 cents a share, including a charge of $1 billion to settle a mortgage-linked probe, compared with profit of $5.6 billion at the same period last year.

Check out:Bank stocks are soaring, but now it's time to go for quality (http://www.marketwatch.com/story/bank-stocks-are-soaring-but-now-its-time-to-go-for-quality-2017-10-10)

And see:Third-quarter earnings seen as 'an easy beat,' may bring more market records (http://www.marketwatch.com/story/third-quarter-earnings-seen-as-an-easy-beat-could-set-up-more-stock-market-records-2017-10-09)

Shares of Applied Optoelectronics Inc.(AAOI) fell 21% in premarket trade. The fiber-optic networking company warned investors (http://www.marketwatch.com/story/applied-optoelectronics-down-more-than-17-on-profit-revenue-warning-2017-10-12) about lower-than-expected third-quarter profit and revenue late Thursday.

Antares Pharma Inc.(ATRS) shares sank 40% before the bell, after the company's announcement Thursday that the U.S. Food and Drug Administration had found deficiencies in the drug Xyosted (testosterone enanthate) during its review process.

Monsanto Co.(MON) shares moved 1.7% higher premarket after Bayer AG said it has reached a $7 billion deal to sell parts of its crop-science business (http://www.marketwatch.com/story/bayer-agrees-7-billion-sale-of-assets-to-basf-in-aid-of-monsanto-megadeal-2017-10-13) to rival BASF SE.

What are other assets doing?

Bitcoin recently traded 5% higher at $5,702, after climbing as high as $5,856 earlier Friday, according to CoinDesk data. The cryptocurrency began setting new records (http://www.marketwatch.com/story/bitcoin-soars-to-a-new-all-time-high-above-5100-2017-10-12) after jumping on Thursday.

Check out:5 reasons bitcoin has roared to its highest level ever, defying Dimon's 'fraud' call (http://www.marketwatch.com/story/5-reasons-bitcoin-has-roared-to-its-highest-level-ever-defying-dimons-fraud-call-2017-10-12)

European stocks (http://www.marketwatch.com/story/dax-on-track-for-another-record-as-bayer-rises-on-deal-news-2017-10-13) were modestly higher, while most Asian markets closed with gains, with Japan's Nikkei benchmark rising 1%.

Gold futures (http://www.marketwatch.com/story/gold-churns-below-key-1300-line-ahead-of-consumer-inflation-snapshot-2017-10-13) slipped 50 cents (http://www.marketwatch.com/story/gold-rises-tries-to-regain-grip-on-1300-level-2017-10-12), while oil futures (http://www.marketwatch.com/story/oil-prices-surge-on-strong-chinese-crude-imports-and-iran-uncertainty-2017-10-13) climbed 1.5% to trade above $51 a barrel.

The ICE U.S. Dollar Index (http://www.marketwatch.com/story/dollar-in-holding-pattern-with-inflation-data-to-highlight-feds-aim-to-hike-rates-2017-10-13) was searching for firm direction, after slipping 0.1% on Thursday. The gauge was on track for its first weekly fall in five weeks.

(END) Dow Jones Newswires

October 13, 2017 09:09 ET (13:09 GMT)