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Wall Street hits fresh record highs

Stocks are opening slightly lower on Wall Street Friday after US retail sales and producer price index come in softer than expected in July. After a very ordinary showing for much of this week, the markets picked up momentum yesterday, which propelled the averages to record highs. The perch on top by itself could create concerns for the markets on the valuation front. That said, the direction of commodity prices and economic data on retail sales, consumer sentiment and producer prices may also impact sentiment.

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The Standard & Poor’s 500 index gained 10.30 points, or 0.5 percent, to 2,185.79.

Wall Street capped a record-setting week with a day of mostly listless trading Friday that left the three major USA stock indexes essentially flat.

The rally was boosted by growing employment numbers in the US, reports on a high crop yield from the US Agriculture Department, and a positive earnings report released by retail giant Macy’s.

Giving the Nasdaq its biggest boost on Friday, shares of chipmaker Nvidia gained 5.6 percent to $63.04, a day after it reported its fastest quarterly sales growth in almost five years. Financials followed with a 0.4 percent decline.

The University of MI is set to release its preliminary consumer sentiment index for August at 10 am ET. Economists expect the index to come in at 91, up from 90 in July.

In major corporate news, Dillard’s ( DDS ) reported a steep drop in second quarter profits and below-consensus revenues.

Negative sentiment could also be generated by a report from the Commerce Department showing that US retail sales were unexpectedly flat in the month of July.

Nvidia (NVDA.O) rose 5.6 per cent after the chipmaker reported its fastest quarterly sales growth in almost five years. The Nasdaq also closed at a record high last Friday, Tuesday and Thursday. The company also announced turnaround initiatives, which include closure of 95 underperforming restaurants by September. The Japanese market returned to trade after being shut Thursday for a public holiday, and the benchmark Nikkei 225 was up 0.81%.

The Nasdaq added 23.81 points, or 0.5 percent, to 5,228.40. Kimco Realty slid 33 cents, or 1.1 percent, to $30.74. The FTSEurofirst 300 index gained 0.1 percent. After three months of gains, retail sales were “virtually unchanged” in July, missing expectations to grow by 0.4%.

Many traders believe stocks have room to climb further still. The average is now up about 0.1% from its last record set on July 20. The 5-Year Note was yielding 1.10 percent.

Meanwhile, the German Federal Statistical Office reported that the German GDP rose 0.4 percent quarter-over-quarter in the second quarter, a slowdown from the 0.7 percent growth in the first quarter. In the prior period, PPI was up 0.5 percent. Exports and domestic demand solidly supported growth.

A separate report from the Commerce Department is expected to show that business inventories crept up by 0.1 percent in the month of June.

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Shares of Bank of America (BAC.N), JPMorgan (JPM.N), Citigroup (C.N) fell between 0.8-1.0 per cent and were among the top five stocks that dragged down the S&P. Inflation remains modest at both producer and consumer levels.

Strong earnings, surge in oil power Dow to record high (Update 1)