The Dow is flat near 35,000 as investors digest retail sales, earnings

U.S. stock indexes traded near the flatline Friday as investors digested the latest retail sales data and results from the first major week of second-quarter earnings

The Dow Jones Industrial Average fell about 55 points, or 0.16%, after opening above 35,000. The index closed just short of that level on Monday. The S&P 500 dipped 0.12% and the Nasdaq Composite was little changed.

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.

The retail sales data came after initial jobless claims numbers released Thursday totaled 360,000 for the week ending July 10, its lowest level since March 14, 2020.

“The unexpected rise in retail sales combined with yesterday’s pandemic-era low of jobless claims are two more strong proof points that we are edging closer to a full economic recovery,” said Mike Loewengart, managing director of investment strategy for E*TRADE Capital Management.

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.

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.