Here are the most important news, trends and analysis that investors need to start their trading day:
- Wall Street looks flat after a bright spot in a tough month
- Investors digest stronger retail sales, weaker jobless claims
- Much of September losses historically come in back of month
- FDA strikes cautious tone ahead of vaccine booster meeting
- Southwest Airlines unveils new Covid vaccine incentives for staff
U.S. stock futures were flat Thursday after stronger-than-expected retail sales data. The Dow Jones Industrial Average and S&P 500 on Wednesday rallied for their second gain in the past eight sessions. The Nasdaq broke a five-session losing streak. Ahead of Thursday's open on Wall Street, the Dow, S&P 500 and Nasdaq were all down during the historically rough month of September. The Dow was 2.3% away from its Aug. 16 closing record. The S&P 500 was more than 1.2% from its Sept. 2 closing record. The Nasdaq was 1.4% away from its Sept. 7 closing record.
Retail sales posted a surprise gain in August despite fears that escalating Covid cases and supply chain issues would hold back consumers. Sales increased 0.7% for the month compared with estimates of a 0.8% decline. In a separate report, initial jobless claims for the week ended Sept. 11 came in higher than expected, rising to 332,000 from the prior week's pandemic-era low, which was revised slightly higher to 312,000. Investors are looking at Thursday's data for signals on how the economy is weathering Covid and how that might figure into the Federal Reserve's thoughts on when to start tapering bond purchases. Central bankers are set to hold their two-day September meeting next week.
The Fed's policy statement next Wednesday and Fed chief Jerome Powell's news conference are wild cards during an already particularly weak period for stocks. Historically, the bulk of September's losses come in the back half of the month. In fact, it appears the S&P 500 usually peaks around the 17th day of the month, which is this Friday. CNBC's Jim Cramer and others on Wall Street have warned about this pattern. So far in September, the index was down nearly 1%. The Dow and Nasdaq, for the month, were down 1.5% and 0.6%, respectively. However, year to date, the S&P 500 was up nearly 19.3%; the Dow was up over 13.7%; and the Nasdaq was up 17.6%.
The FDA's staff has declined to take a stance on whether to back Covid booster shots of Pfizer's vaccine, saying U.S. regulators haven't verified all the available data. Government advisers will debate boosters Friday. Pointing to Israeli data, Pfizer argued a third dose of its vaccine six months after the second shot restores protection from infection to 95%. Moderna, which also supports boosters, has released data showing breakthrough cases were less frequent in people who were more recently vaccinated with its two-shot vaccine.
Southwest Airlines has introduced new incentives to get staff vaccinated against Covid. The Dallas-based carrier will offer extra pay to workers who show proof of full vaccination by mid-November, according to a company memo, which was reviewed by CNBC. U.S. airlines have taken varying approaches to get staff vaccinated. United has required its roughly 67,000-person U.S. workforce to be vaccinated, saying it will put staff who receive religious exemptions on temporary unpaid leave. Delta Air Lines plans to charge unvaccinated employees $200 more per month for company health insurance starting in November.