Midday Wrap: Sentiment Sours Market Mood

The major indices struggled to end the weak on a positive note Friday in the wake of a souring consumer mood. Both the S&P 500 and Dow traded near flat by noon after hitting all-time-highs earlier in the week. The Nasdaq edged lower.

StockTwits.com users predicted that a drop in consumer sentiment would make it unlikely that the market would rally to end the week.

$BAC Consumer Sentiment just killed any chance of a buy the market dip today….

— Seth Smith (@AllenWindsor52) May. 16 at 09:56 AM

A University of Michigan/Thomson Reuters survey indicated that consumer sentiment fell in April. The consumer sentiment index dropped from a reading of 84.1 in April to 81.8 in May. Economists had anticipated a gain to 85. Survey respondents indicated that wage stagnation was the main reason for the slump.

Earnings beats by major retailers including JCPenney, $JCP, Dillard’s, $DDS, and Nordstrom, $JWN, countered some of the negative sentiment.

The retail space is colorful. Nordstrom at all-time highs. JC Penny at 6mo high. $JWN $JCP

— Ivaylo Ivanov (@ivanhoff) May. 16 at 09:48 AM

@ivanhoff $DDS a beauty too

— TwentyOne (@TwentyOne) May. 16 at 09:55 AM

Some investors said there was enough positive news out there to warrant a push higher by end-of-day.

$IWM $QQQ $SPY The way the markets are setting up, looks like they'll base during lunch and then the bulls will try to push higher last hour

— VR. (@ChalanTA) May. 16 at 11:55 AM

But most investors on StockTwits.com anticipated the weak ending with a whimper. Sentiment on the ETFs that track the S&P 500, $SPY, Dow, $DIA were majority bearish.

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