Dow Jones trims gains on tepid Friday

• The Dow Jones index is stuck below 44,750 on Friday.
• Retail Sales missed forecasts, prompting investor caution.
• The Dow is still poised to end the week in the green, but headwinds are building.

The Dow Jones Industrial Average (DJIA) cooled on Friday, shedding around 100 points and waffling into the 44,600 region after US Retail Sales missed the mark in January. US data broadly came in below previous figures, except for the Export Price Index, which accelerated at its fastest pace in nearly three years.

US Retail Sales came in well below expectations in January, contracting by 0.9% versus the forecast of -0.1%. The previous month’s print was revised higher to 0.7%, but the steep dropoff knocked investor confidence for a loop early during the US market session. Core Retail Sales fared better but still fell to -0.4% against the 0.3% forecast and 0.7% last post-revision.

January’s Export Price Index rose to a 32-month high of 1.3%, well above the 0.3% forecast and 0.5% last. Industrial Production beat forecasts, coming in at 0.5% versus the expected 0.3%, but the figure still fell short of the previous revised print of 1.0%.

Markets will get an extended weekend with the President’s Day holiday set for Monday. The key prints next week will be the Federal Reserve’s (Fed) latest Meeting Minutes, due to release on Wednesday, with Purchasing Managers Index (PMI) survey results slated for next Friday.

Dow Jones news

Roughly two-thirds of the Dow Jones equity board is tilted into the bearish side on Friday after Retail Sales came in much lower than expected. Key energy and banking giants are propping up the bullish side of the equity index, but concentrated losses at the bottom end are dragging the Dow Jones lower. Chevron (CVX) and Goldman Sachs (GS) both rose around 1.6%, hitting $660 and $156 per share, respectively. Procter & Gamble (PG) fell 3.4% to $165 per share after the conglomerate noted that “recent volatility” is crimping its food sales growth expectations for the upcoming year.

Dow Jones price forecast

The Dow Jones is grinding its way into a consolidation pattern between 45,000 and 44,000. The major equity index has been cycling between the two price levels since rising into the region in mid-January, and price action is getting boxed in by a technical ceiling at record highs near 45,070, a level the Dow hasn’t been able to recover since last November. 

Bearish momentum still remains limited, and a dip back to the 50-day Exponential Moving Average (EMA) will present a tempting jump-in point for bulls looking to reload on long positions.

Dow Jones daily chart