JWN Nordstrom Inc

By Ellie Ismailidou and Barbara Kollmeyer, MarketWatch

J.C. Penney, Nordstrom tumble on weak earnings

U.S. stock futures were in negative territory ahead of Friday's open, as investors braced for a key update on retail sales against a backdrop of disappointing news in that sector and a fresh drop in oil prices.

Dow Jones Industrial Average futures fell 63 points, or 0.4%, to 17,605, while futures for the S&P 500 were down 6 points, or 0.3%, to 2,053. Nasdaq-100 futures lost 14 points, or 0.3%, to 4,322.

The Dow industrials barely eked out a gain on Thursday (http://www.marketwatch.com/story/us-stocks-look-set-to-recover-from-corporate-bruising-2016-05-12), and the S&P 500 finished flat. Equities were prevented from making gains largely due to a steep slide in Apple Inc.(AAPL) and other technology shares. A biotech selloff also weighed on the Nasdaq Composite .

The week has been muted for stocks. With one session left to go, the Dow industrials are down 0.1%, and the S&P 500 is up just 0.3%. The Nasdaq Composite is flat.

"The lack of catalysts this week have left investors without any direction. I don't think this is helped by a number of assets currently being at elevated levels, oil and U.S. equities to name just a couple," said Craig Erlam, senior market analyst at Oanda, in emailed comments.

The focus for Friday is split, with investors watching oil and waiting for important economic data.

Crude oil prices (http://www.marketwatch.com/story/oil-price-rally-fades-as-oversupply-fears-crop-up-again-2016-05-13) moved lower, with West Texas Intermediate down 1.5%, as comments from Russian Energy Minister Alexander Novak drew attention. He told reporters on Thursday he doesn't see the oil market balancing out until the first half of 2017, Reuters reported.

Oil prices rallied Thursday after an International Energy Agency report said declines in global production will ease a crude supply glut. A reading on North America's oil-rig count is expected Friday afternoon.

Big data ahead: The April retail sales report is coming at 8:30 a.m. Eastern Time, along with producer prices for the same month. That data will be followed by the University of Michigan's consumer sentiment index for May, due for release at 10 a.m. Eastern, alongside business inventories for March.

The dollar and U.S. stocks took a hit on Wednesday after U.S. retailers such as Macy's Inc.(M) and Kohl's Corp.(KSS) delivered weaker earnings reports and downgraded 2016 forecasts.

"Investors are wondering if the U.S. economy is really that strong if nobody is spending money," wrote Marshall Gittler, head of investment research at FXPRIMUS Europe, in a note to clients on Friday.

Gittler said the market will be watching the retail sales figures for a clue as to just how healthy the U.S. economy is. "If the figures are good, the odds of a [Federal Open Market Committee] move in June--currently only 6%--or July, 17%--could rise somewhat, thereby supporting the dollar," he wrote.

But disappointing retail data would probably confirm the Federal Reserve is nowhere close to an interest-rate increase, and market reaction will likely be neutral, he said.

Read:Deutsche Bank thinks this is the biggest threat to the U.S. economy (http://www.marketwatch.com/story/deutsche-bank-thinks-this-is-the-biggest-threat-to-the-economy-2016-05-12)

The dollar (http://www.marketwatch.com/story/dollar-slips-as-market-looks-ahead-to-next-weeks-g-7-2016-05-13) pulled back against the yen as investors grew cautious ahead of that data.

Fed speak: Comments from Fed Chairwoman Janet Yellen could draw some attention. In a letter to Rep. Brad Sherman (D.,Calif.) (http://www.marketwatch.com/story/feds-yellen-says-negative-rates-would-need-careful-consideration-2016-05-13) released by his office on Thursday, she said the central bank wouldn't rule out using negative interest rates, but such a move would require careful consideration.

San Francisco Fed President John Williams will speak to the Sacramento Economic Forum in Sacramento, Calif., at 6:25 p.m. Eastern Time.

Stocks to watch:J.C. Penney Co. Inc.(JCP) tumbled nearly 10% before the bell after the company missed quarterly sales estimates (http://www.marketwatch.com/story/jc-penney-shares-tumble-after-weak-sales-fall-short-of-estimates-2016-05-13) as same-store sales fell way below expectations.

Nordstrom Inc.(JWN) shares plunged 17% after the retailer reported lower-than-expected first-quarter sales (http://www.marketwatch.com/story/nordstrom-shares-plunge-after-revenue-eps-miss-2016-05-12) and earnings.

Nvidia Corp.(SHAK) shares climbed 7.4% after the company's profit rose 46% in the latest quarter as the chip maker saw strong growth (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=8&cad=rja&uact=8&ved=0ahUKEwj_q-v3gtfMAhWC4yYKHd2RA3oQqQIIMTAH&url=http%3A%2F%2Fwww.marketwatch.com%2Fstory%2Fnvidia-shares-rally-5-after-earnings-outlook-top-street-view-2016-05-12&usg=AFQjCNHU-3P5jnI19CcJkml2qm_KcG_TpQ&bvm=bv.122129774,d.eWE) in gaming products as well as newer sectors like automotive "infotainment."

Shake Shack Inc.(SHAK) shares gained premarket after the company swung to a better-than-expected profit for its first quarter, boosted by strong same-store sales (http://www.marketwatch.com/story/shake-shacks-strong-same-store-sales-boost-profit-2016-05-12) and new location openings, leading the chain to raise its annual guidance.

Apple will invest $1 billion in Didi Chuxing Technology Co., China's homegrown competitor to Uber Technologies Inc., the iPhone maker announced late Thursday (http://www.marketwatch.com/story/apple-puts-1-billion-into-chinas-uber-rival-didi-2016-05-13).

U.S.-listed shares of Royal Dutch Shell PLC(RDSB.LN) (RDSB.LN) (RDSB.LN) (RDSB.LN) could be active. Shares fell in London after an estimated 2,100 barrels of crude leaked from a Royal Dutch Shell facility in the Gulf of Mexico Thursday (http://www.marketwatch.com/story/shell-shuts-well-after-leak-into-gulf-of-mexico-2016-05-12).

Other markets: Asian markets (http://www.marketwatch.com/story/oil-volatility-unsettles-asian-markets-nikkei-set-for-around-2-weekly-gain-2016-05-13) finished Friday lower, with markets rattled by oil-price volatility. The Nikkei 225 index dropped 1.4%, though it finished the week nearly 2% higher. The Shanghai Composite Index lost 0.3% on the day, but posted a nearly 3% drop for the week.

European stocks tracked global markets lower (http://www.marketwatch.com/story/european-shares-push-lower-heading-for-third-straight-weekly-drop-2016-05-13) after a rough week on the earnings front. Gold prices rose $4, or 0.3%, to $1,275.10 an ounce.

Read: Investors' appetite for gold is soaring, and there is little sign of a slowdown (http://www.marketwatch.com/story/investor-appetite-for-gold-is-soaring-and-theres-little-sign-of-a-slowdown-2016-05-12)

(END) Dow Jones Newswires

May 13, 2016 08:25 ET (12:25 GMT)

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