Dow gives up earlier gain, loses 130 points despite strong retail sales

The Dow Jones Industrial Average drifted lower Friday even as the latest retail sales numbers came out better-than-expected.

The Dow lost 115 points, or 0.33%, after opening above 35,000. The index closed just short of that level on Monday. The S&P 500 dipped around 0.2% and the Nasdaq Composite edged about 0.1% lower.

Retail and food service sales rose 0.6% in June, while economists surveyed by Dow Jones had expected a 0.4% decline. Excluding autos, those sales jumped 1.3%, beating economists’ estimate of a 0.4% gain.

Weaker performance from technology stocks weighed on the market. Shares of Netflix fell more than 1% ahead of the streaming giant’s second-quarter earnings report next week. Nvidia shares fell about 2%.

Investors also digested strong earnings results from the first major week of second-quarter reports. Though some of the nation’s largest companies posted healthy profits and revenues amid the economic recovery, the reaction in the stock market has so far been muted.

Morgan Stanley’s second-quarter earnings report, for example, topped analysts’ expectations Thursday, yet its shares closed just 0.18% higher.

For 18 S&P 500 companies that beat analyst estimates for second-quarter earnings this week, the average earnings-per-share result was 18% higher than expected. But those companies saw their shares fall 0.58% on average after reporting.

The soft moves in reaction to corporate earnings have contributed to a lackluster week for the S&P 500, which dipped 0.2% on the week as of Thursday’s close. However, the broad index is up about 16% this year.

Much of the market’s upward pressure over the last week has come from a handful of mega-cap internet and communications stocks. Apple, Netflix, Google-parent Alphabet and Microsoft are all up this week.

— CNBC’s Yun Li contributed reporting.