US Stocks Mixed After Weak Retail Sales Data; Oil Prices Rise

Wall Street stocks staged a partial recovery Friday following mixed banking earnings and disappointing retail sales as markets continue to weigh worries over tightening monetary policy.

The S&P 500 and the Nasdaq ended in positive territory after falling sharply earlier in the session on a day that also saw equity markets in Asia and Europe retreat.

"Market overcomes hurdles in front of three-day weekend as investors buy the intraday dip," Briefing.com said in a summary.

The benchmark Dow lost 200 points Friday, while the broad-based S&P 500 finished slightly positive for the day, but down 0.3 percent for the week.

In economic data, retail sales fell 1.9 percent in the final month of the year, the Commerce Department said, as shoppers pulled back amid the latest Covid-19 wave and as higher prices bit into consumption.

A University of Michigan survey showed consumer sentiment fell sharply in January, due to the Omicron wave and escalating inflation.

Banks, meanwhile, reported mixed results, with JPMorgan Chase diving after it reported record annual earnings, but signaled higher costs, including for increased salaries.

Citigroup also fell, while Wells Fargo jumped after its results.

Brian Price, head of Investment Management for Commonwealth Financial Network, pointed to "a few negative catalysts" driving the market.

"The weak retail sales print along with underwhelming earnings reports and guidance from some large banks both seem to be weighing on the market," he told AFP.

The volatility comes as markets continue to assess likely Federal Reserve actions after several central bank officials said this week they expect multiple interest rate hikes in 2022.

New York Fed President John Williams on Friday was the latest central bank official to signal coming rate increases to combat inflation, but he said the timing and number of hikes will depend on how the data evolve.

European Central Bank President Christine Lagarde also pledged to to "take any measures necessary" to combat rising inflation.

Meanwhile, oil prices continued to push higher in expectations of a tight crude market with demand recovering from the worst of the Covid-19 period.

"Crude oil prices have continued to look resilient with concerns about geopolitical risk and a Russian incursion into Ukraine raising the stakes, as well as keeping a floor under prices," said Michael Hewson at CMC Markets.

"With some OPEC+ members already struggling to lift production to meet the new output targets, concern over supply shortfalls has been growing," he added.