U.S. stock futures edged lower Friday as quarterly results continued to pressure shares of retailers, while economic releases weighed on the dollar and Treasury yields.
Futures pointed to a 0.2% opening decline for the S&P 500, following its biggest daily loss in three weeks -- a drop of just 0.2%.
Department store chains continued to drag down the index in premarket trading even as data showed U.S. retail sales improved in April, pointing to stronger consumer spending.
Shares of Nordstrom dropped 5.8% ahead of the market open after it reported an unexpected fall in same-store sales, while J.C. Penney shares fell 11% after the department store operator reported a first-quarter loss. Downbeat results from Macy's on Thursday had sent its shares down roughly 17%, spurring concerns about the sector.
"Looking at traditional brick and mortar sales, it's pretty clear [retailers] are losing to online juggernauts," said Jimmy Chang, chief investment strategist at Rockefeller & Co.
Investors also parsed a reading on inflation Friday showing consumer prices rose only modestly in April. Stocks were little moved, but the WSJ Dollar Index edged down 0.2% after the report. 10-year U.S. Treasury yields edged down slightly to 2.355% from 2.400% Thursday. Yields move inversely to prices.
U.S. stocks are on track to end the week 0.4% lower, snapping a three-week winning streak. Despite recent weakness in retailers, the overall earnings picture in the U.S. has been supportive of markets this quarter, with companies on track for the fastest growth in earnings per share since 2011, according to CFRA Research.
That has helped U.S. stock indexes hover close to record highs, while volatility has fallen to ultralow levels.
"The first-quarter earnings seasons is one of the best overall we've seen in the past decade," said Olivier Marciot, investment manager at Unigestion. Upbeat growth, inflation, corporate results and easy financing conditions justify being invested in risky assets, he said.
"Consumption has been kind of weak in the last couple of months...but we are not worried at all for the moment about the U.S. consumer," Mr. Marciot said.
Elsewhere, the Stoxx Europe 600 edged up 0.1% as data showed Germany's economy outpaced the U.S. at the start of the year.
"People are kind of gravitating toward Europe, because for now, all of a sudden Europe has economic growth," said Mr. Chang.
Investors have poured money into the region's equities in recent weeks, with a record inflow of $6.1 billion into European equities since centrist Emmanuel Macron won the French election, according to Bank of America Merrill Lynch. European stocks are close to two-year highs as political jitters have given way to increasing signs of an improving economy and corporate earnings.
Earlier, stock markets were broadly lower in Asian trading hours, tracking weakness in Europe and the U.S. on Thursday. Japan's Nikkei Stock Average fell 0.4% Friday as the yen strengthened modestly against the dollar, but gained 2.3% for the week. South Korea's Kospi was off 0.5% after reaching a record high, while Australia's S&P/ASX 200 declined 0.7%.
Hong Kong's Hang Seng Index inched higher for a fifth consecutive trading day while the Shanghai Composite rose 0.7%, led by gains in insurance, aviation and automotive shares.
Lucy Craymer, Patrick Sullivan, Jacob M. Schlesinger and Nina Adam contributed to this article.
Write to Riva Gold at firstname.lastname@example.org and Lucy Craymer at Lucy.Craymer@wsj.com
(END) Dow Jones Newswires
May 12, 2017 09:14 ET (13:14 GMT)