NEW YORK (TheStreet) -- U.S. stocks fluctuated on Friday caught between better-than-expected retail sales and worries that Europe's economic woes will continue to be a drag on global growth..
The Dow Jones Industrial Average slipped 0.1% and the S&P 500 dropped 0.06% while the Nasdaq added 0.09%. If the Dow and S&P 500 can finish higher on Friday, the indices will notch another record-setting high.
In Washington, the U.S. House approved legislation to allow for construction of the enormous and controversial Keystone XL pipeline by a vote of 252 in favor versus 161 against. The Senate is scheduled to vote on the bill on Nov. 18. If it passes, legislation on the oil pipeline, slated to run from oil fields in Alberta, Canada through the plain states and as far south as the Texas Gulf Coast, would go to President Obama.
"This will create other economic activity," said U.S. Rep. Bill Cassidy, a Republican sponsor of the bill. "This will ripple through the economy." However, plunging crude oil prices could undercut the project's value. Since summer, West Texas Intermediate crude has dropped around 25% as supply outstrips demand. On Thursday, the commodity slipped under $75 a barrel, a four-year low.
Better-than-expected October retail sales positively portended the holiday shopping season. Spending excluding gasoline, autos and food services increased 0.5%, the biggest increase since August and above an expected 0.4% increase.
"We've been waiting for the consumer to come back into the marketplace," Hennessy Funds' Brian Peery said over the phone. "Now with gas prices dropping downward, you really start to see some discretionary income coming back to the middle-income and low-end consumer who now have the ability to spend a little bit coupled with an increase in jobs."
Oil prices partially recovered from a nearly 4% drop on Thursday that saw the commodity fall to under $75 a barrel for the first time in four years. Prices had tumbled on fears OPEC wouldn't inhibit its production in the face of a global supply glut. On Friday, West Texas Intermediate crude had added 1.4% to $75.21 a barrel.
Consumer sentiment in November spiked to a seven-year high as better labor market conditions and lower gasoline prices boosted optimism. The preliminary reading came in at 89.4, its highest level since mid-2007, according to the Thomson Reuters/University of Michigan survey. Economists had expected a reading of 87.5.
Business inventories also improved, up 0.3% in September compared to an expected 0.2% increase. In August, the measure increased 0.2%.
Meanwhile, the eurozone released GDP growth of just 0.2% in its third quarter, as economists expected though sparking fears of deflation. There were some bright spots in the report though, with France posting economic expansion for the first time this year and Greece outperforming the region with a 0.7% bump in GDP.
Pessimism over the eurozone's outlook, and its impact on global markets, remain though. The world economy is believed to be at its worst since 2012, according to those polled by Bloomberg, with a total 38% describing its position as deteriorating with a majority citing eurozone deflationary risk.
St. Louis Federal Reserve President James Bullard told an economic forum on Friday that lower oil prices and a tightening job market were indicative of the U.S. economy's strength and justified a rate hike as early as the first quarter of next year.
"While a low inflation rate may suggest a somewhat lower-than-normal policy rate, that effect is not large enough to justify remaining at the zero lower bound," said Bullard, a long-time Fed hawk
Hertz (HTZ) shares were down 5% after the car rental company said it would restate earnings for the past two years as part of its ongoing accounting review.
Nordstrom (JWN) shares were adding 1.3% after the retailer posted a 9% jump in sales and beat earnings estimates.
Shanghai-based social network SINA (SINA) stumbled 5.4% after guiding to fourth-quarter sales growth below estimates.
Pandora (P) spiked 15.8% following CEO Brian McAndrew's disclosure he had purchased 25,000 shares.
Virgin America (VA) surged 32% after its market debut on the Nasdaq on Friday. Shares in the IPO of the Richard Branson-backed company were initially priced at $23 a share, raising more than $300 million.
-- Written by Keris Alison Lahiff in New York.