US stocks traded marginally higher Thursday, as investors digested more strong earnings from the banking sector as well as disappointing retail sales data.
At 09:35 ET (14:35 GMT), the Dow Jones Industrial Average rose 22 points, or 0.1%, the S&P 500 index gained 10 points, or 0.2%, and the NASDAQ Composite climbed 30 points, or 0.2%.
The main Wall Street indexes had recorded strong gains on Wednesday, helped by benign inflation data and strong bank earnings. Investors also welcomed a U.S.-brokered ceasefire deal between Israel and Hamas, which heralds cooling geopolitical tensions in the Middle East.
Retail sales disappoint
US retail sales increased at a slower-than-anticipated month-on-month rate in December, in the latest data point that could paint a picture of the state of the American economy heading into the new year.
Retail sales grew by 0.4% last month, decelerating from an upwardly revised pace of 0.8% in November, and below the 0.6% expected.
Elsewhere, the number of Americans filing for unemployment benefits ticked up by more than expected to 217,000 in the week ending on January 11, rising from an upwardly revised mark of 203,000 in the previous week.
This economic weakness has taken some of the gloss from the prior session's healthy gains after consumer prices showed inflation unexpectedly eased in December, albeit slightly. The core CPI in particular read slightly lower than expected, while the headline figure was in line with expectations.
The data sparked some bets that cooling inflation will invite more interest rate cuts from the Federal Reserve, especially after the producer price index, released on Tuesday, read lower than expected
Markets are still pricing in about two rate cuts this year, half of the four initially projected for the year. Higher-for-longer rates signal some pressure on risk-driven assets in the coming months.
Bank earnings continue
The banking sector will remain in focus Thursday after more solid quarterly earnings.
Morgan Stanley (NYSE:MS) stock rose over 2% after its profit increased in the fourth quarter, fueled by a wave of dealmaking for the investment bank.
Bank of America (NYSE:BAC) stock edged higher after the second-largest US lender reported higher profit as its investment bankers capitalized on resurgence in dealmaking in the fourth quarter.
These numbers followed buoyant returns from several of their peers on Wednesday.
JPMorgan Chase (NYSE:JPM) posted an all-time high annual profit underpinned by a fourth-quarter recovery in markets, while Goldman Sachs (NYSE:GS) logged its best-ever quarterly income, Wells Fargo's (NYSE:WFC) bottom-line figure topped estimates, and Citigroup (NYSE:C) swung to a profit.
Crude hands back some gains
Oil prices slipped lower Thursday, handing back some of he recent highs, driven by a combination of softer US inflation data, new sanctions on Russian oil, and significant drawdowns in US crude inventories.
By 09:35 ET, the US crude futures (WTI) were 0.6% lower at $78.25 a barrel, while the Brent contract traded down by 0.5% at $81.63 a barrel.
Oil prices rose more than 2% on Wednesday, to their highest levels since July, as a benign US inflation report brought expectations of softer monetary policy back into play, potentially boosting economic growth.
Supporting the bullish sentiment, the US Energy Information Administration reported a drawdown in crude oil inventories of 2 million barrels, indicating a tightening of supply.
