U.S. Stocks Slip as Retail Sales Growth Slows
By Joe Wallace
The S&P 500 bobbed around the flatline Friday after new data
showed a small pickup in retail spending last month, suggesting the
continuation of a choppy economic recovery.
The broad index fell 0.3% shortly after the opening bell,
pushing the S&P 500 further from breaching its pre-pandemic
high. The S&P 500 has been flirting with its Feb. 19 record all
week, crossing the level during intraday trading only to close
The day-to-day swings have put the S&P 500 on course to end
the week 0.5% higher, its weakest stretch over the past three
Friday's weak action followed the release of new retail sales
data that showed spending rose 1.2% in July, down from an 8.4% rise
in June. One factor behind the muted gain may have been the
expiration of enhanced unemployment checks last month, lightening
some consumers' pockets.
The end of those benefits has put pressure on lawmakers to reach
a deal on new aid, but Democrats and the White House have been in a
deadlock, contributing to some of the volatility over the past
"The market has been quite stoical this week," said Jane Foley,
head of foreign-exchange strategy at Rabobank. "It's August, so we
may have to wait until September to find any strong direction."
The moves of other major indexes reflected the S&P 500's
decline. The Dow Jones Industrial Average fell 135 points, or 0.5%,
to 27761.22, while the Nasdaq Composite slid 0.3%.
Investors, meanwhile, bought safer assets, including Treasurys.
That pushed yields down to 0.703%, from 0.714% Thursday.
Tech and consumer discretionary stocks led the market lower,
falling 0.3% and 0.4% in recent trading. Most other sectors were
also in the red after notching minor losses.
Money managers are also awaiting trade talks between senior U.S.
and Chinese officials, scheduled for Saturday. Relations have
deteriorated in recent months, concerning investors who think fresh
barriers to trade would further hurt the global economy.
The main thrust of the discussion is aimed at evaluating China's
compliance with a bilateral trade agreement signed in January.
Chinese Vice Premier Liu He, President Xi Jinping's chief trade
negotiator with Washington, is expected to bring up concerns over
the executive orders against the WeChat and TikTok apps.
"The tone of these talks will be crucial," Ms. Foley said.
"There is a concern that China has perhaps not fulfilled its
promises in, for example, importing agricultural or energy goods
from the U.S."
In overseas markets, travel-and-leisure companies led European
shares lower, pushing the Stoxx Europe 600 down 1.2%. The U.K.
government late Thursday imposed a quarantine on people traveling
from France, the latest in a series of restrictions designed to
stem rising coronavirus cases in the region.
The Shanghai Composite Index rose 1.2% after data showing
China's recovery continued in July, though the economy shed some
momentum as Beijing eased off stimulus measures. Industrial
production rose 4.8% from a year before but retail sales fell
-- Michael Wursthorn contributed to this article.
Write to Joe Wallace at Joe.Wallace@wsj.com
(END) Dow Jones Newswires
August 14, 2020 10:16 ET (14:16 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.