The market tried to extend yesterday’s gains this morning after a better-than-expected retail sales reading but is trading slightly lower after digesting the news. The Commerce Department said US retail sales showed a 0.2% drop but was better than the 0.3% decline forecast by Wall Street.
The real problem came from the auto-makers which reported a 2.8% decline in auto sales which was their biggest setback in 10 months. The weak economy and climbing gas prices have cooled the demand for new cars and its only going to get worse some fear.
If you take away auto, retail sales actually rose in April by 0.5% as sales at general merchandise stores kept pace with the theme that consumers are buying in bulk and looking for discounts. This was much better than the 0.1% rise we got in March.