S&P 500 drifts from record levels as retail sales slow

By Ambar Warrick and Medha Singh (Reuters) - Wall Street was muted on Friday, with the S&P 500 slipping from near record highs, as a slowdown in domestic retail sales growth added to worries about a wobbly post-pandemic economic recovery in the absence of a new U.S. fiscal stimulus bill

Reuters August 15, 2020 01:08:14 IST
S&P 500 drifts from record levels as retail sales slow

SP 500 drifts from record levels as retail sales slow

By Ambar Warrick and Medha Singh

(Reuters) - Wall Street was muted on Friday, with the S&P 500 slipping from near record highs, as a slowdown in domestic retail sales growth added to worries about a wobbly post-pandemic economic recovery in the absence of a new U.S. fiscal stimulus bill.

Technology <.SPLRCT>, which has been the best performing sector through the pandemic, led declines among the 11 major S&P indexes, while financials <.SPSY> and industrials <.SPLRCI> outperformed.

Aggressive stimulus measures have helped Wall Street's three main indexes bounce from a coronavirus -driven crash in March, and the S&P 500 briefly traded above its Feb. 19 record close for a second straight day on Thursday.

Although the benchmark index was set to rise for a third straight week, it has struggled to top its all-time high of 3,393.52, as talks between top Democrats and the White House over more stimulus measures to support the economy reached a deadlock.

"A lot of the economic data points that we will see in the next 2-3 months are definitely going to hinge on not having a stalemate in talks," said David Wagner, portfolio manager and analyst at Aptus Capital Advisors in Cincinnati, Ohio.

Data on Friday showed U.S. retail sales increased less than expected last month and could slow further due to spiraling COVID-19 cases and a reduction in unemployment benefit checks. The figures also came on the heels of data suggesting a slowdown in China's nascent rebound.

"We still have a long way to go (in terms of an economic recovery) and income support is the way to power the consumer through. If we get strong retail sales data over the next two months, given the lack of recent government action, it should be very positive," Aptus Capital's Wagner added.

Uncertainty over the timing of a stimulus agreement has undercut sentiment in recent sessions, with the upcoming U.S. presidential elections expected to add another layer of caution.

At 11:00 a.m. ET, the Dow Jones Industrial Average <.DJI> was down 26.73 points, or 0.10%, at 27,869.99, the S&P 500 <.SPX> was down 3.44 points, or 0.10%, at 3,369.99. The Nasdaq Composite <.IXIC> was down 50.24 points, or 0.45%, at 10,992.26.

Applied Materials Inc gained 4.4% after it forecast fourth-quarter revenue above analysts' estimates following a rebound in demand for chip equipment and services.

Electric car maker Tesla rose 1.6% after Morgan Stanley upgraded the stock, citing potential in the firm's battery business.

Chinese search engine giant Baidu Inc posted quarterly revenue a notch above estimates, but its shares slid 6.8% after its streaming service iQIYI said it was being probed by the U.S. Securities and Exchange Commission.

Shares of iQIYI dropped 14.1%.

Advancing issues outnumbered decliners by a 1.12-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.26-to-1 ratio on the Nasdaq.

The S&P index recorded 12 new 52-week highs and no new low, while the Nasdaq recorded 32 new highs and six new lows.

(Reporting by Ambar Warrick and Medha Singh in Bengaluru; Editing by Arun Koyyur and Uttaresh.V)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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