Stocks open higher following prior day’s sell-off as government says trade deficit widens

Stocks slightly higher after trade data

NEW YORK — Stocks turned higher a day after a slide as investors weighed a bigger-than-expected increase in the trade deficit and more retail earnings reports.

A disappointing report on consumer sentiment briefly sent stocks lower.

The Commerce Department said Friday that the trade deficit jumped 18.2 percent in September to $36.5 billion. That was the largest deficit since January and more than the $31.7 billion imbalance economists had expected.

The wider deficit was driven by a big rise in imports, led by a jump in oil shipments. That overwhelmed a fifth consecutive increase in exports. Exports are expected to continue to rise as the dollar continues to weaken, which makes U.S. exports less expensive to overseas buyers.

The preliminary Reuters/University of Michigan consumer sentiment index for November came in at 66.0, down from 70.6 in October. That made investors nervous that cautious consumers wouldn’t step up spending at the holidays.

A better-than-expected earnings report from teen clothing retailer Abercrombie & Fitch Co. and an improved outlook from department-store chain J.C. Penney Co. supported the early gains in stock futures.

Meanwhile, the dollar resumed to slump against other currencies. The dollar’s steady decline since March, due largely to record-low U.S. interest rates, has encouraged investors to move money out of dollars and into higher-yielding assets like stocks and commodities.

Doug Roberts, chief investment strategist at ChannelCapitalResearch.com, said investors are cautious about putting more money in stocks after the steep gains in the past eight months.

“The market is trying to figure out where it wants to go,” he said.

In midmorning trading, the Dow Jones industrial average rose 39.15, or 0.4 percent, to 10,236.62.

The broader Standard & Poor’s 500 index rose 2.57, or 0.2 percent, to 1,089.81. The Nasdaq composite index rose 3.72, or 0.2 percent, to 2,152.74.