U.S. stocks were falling early Friday after earnings reports from major retailers beat expectations but set a cautious tone heading into holiday sales season.
The main indices on Wall Street closed in a mixed fashion Thursday, with the 30-stock Dow ending a four-day streak of gains, while the benchmark S&P gained 0.2% and the tech-heavy Nasdaq posted minor gains.
That said, all three averages are on course for weekly gains, which would be their third straight positive week. The S&P 500 and the Nasdaq are up more than 2% so far this week, while the DJIA is on pace for a 1.9% rise.
Sentiment helped by Fed interest rate peak hopes
Sentiment has been boosted this week by data showing cooling inflation in the U.S., raising hopes that the Federal Reserve may have reached the end of an unprecedented and long-standing campaign of interest rate hikes.
Housing data was the focus on Friday. October housing starts of 1.372 million were slightly ahead of expectations and higher than the prior month, while building permits of 1.487 million were also higher than expected.
Top retailers cautious about holiday season
However, despite equity gains seen this week, retail executives, including those at Walmart (NYSE:WMT), the largest retailer in the U.S., warned about the possibility of a slowdown in the final quarter, seeing weakness in the spending habits of inflation-squeezed consumers.
Gap (NYSE:GPS) continued the theme late Thursday, with the clothing retailer posting higher-than-anticipated third-quarter income, but flagged some caution for the key holiday quarter. Shares jumped 24% to a new 52-week high.
BJs Wholesale Club Holdings (NYSE:BJ) beat profit expectations and reported revenue that was in line with forecasts, up 2.9% from last year. It also reaffirmed guidance. Shares fell 2.4%.
Oil heads for weekly loss
Oil prices gained Friday, but were on course for the fourth straight negative week of decline amid signs of increased supplies and fears of worsening global demand.
(Peter Nurse and Oliver Gray contributed to this item.)