THIS IS A BREAKING NEWS UPDATE. AP’s earlier story appears below. Wall Street is drifting on Friday, and a listless day of trading appears set to leave the S&P 500 just shy of its record once again.
The S&P 500 was down 0.1% in afternoon trading after tilting between small gains and losses through the day. The market is taking a pause after nearly erasing the last of the steep losses caused by the coronavirus pandemic. In each of the last two days, the index made a brief run above its record closing high, which was set in February, only to fade in the afternoon. It’s now 0.5% below the record.
More stocks across Wall Street were rising than falling, but the moves were mostly modest. The Dow Jones Industrial Average was down just 3 points, or less than 0.1%, at 27,893, as of 3:05 p.m. Eastern time, while the Nasdaq composite dipped 0.3%.
Consumer spending is the main locomotive for the U.S. economy, and a report on Friday showed some more improvements for U.S. retailers, though less than economists expected. Sales at grocery stores, gas stations and other retailers rose 1.2% last month from June. It’s the third straight month of gains, following a historic plunge in the spring, but it marked a sharp slowdown from June's 8.4% growth. It also fell short of the 2% growth that economists were expecting.
The report showed that the economy is now “more in a gentle phase of recovery," said Mike Zigmont, director of trading and research at Harvest Volatility Management. “It’s positive, but it’s not as ballistic as it was before,” he said.
Economists say consumer spending could be under more pressure following the expiration of U.S. government programs to aid the economy, including $600 in extra unemployment benefits each week. Investors say it’s crucial that Washington deliver another lifeline to the economy, and markets seem to be assuming a deal will happen.
But Democrats and Republicans say they remain far apart on a possible compromise. “Congress has to follow up on the stimulus package because they essentially promised it,” Zigmont said. “Main Street America is counting on it,” he said. “You can’t pull the rug out from under the world.”
The day's trading was notably quiet, with only a handful of stocks in the S&P 500 falling even 2%. Among the biggest gainers in the index was Applied Materials, which rose 3.6%. The tech company reported stronger results for the summer than analysts expected and also gave a better-than-expected forecast for the current quarter.
Outside the S&P 500, shares of German biopharmaceutical company CureVac roughly tripled in their first day of trading. After selling shares at $16 in an initial public offering, the stock jumped as high as $51.48. The company, whose backers include the Bill & Melinda Gates Foundation and the German government, is developing a vaccine against COVID-19 and other medicines using messenger RNA. It was at $49.26 in afternoon trading.
Friday's drift for the S&P 500 has the index on track for a 0.5% gain for the week. That would be its sixth weekly gain in the last seven, but it would also be the slowest in the last three. Treasury yields also slowed their big jump from earlier in the week. The yield on the 10-year Treasury dipped to 0.70% from 0.71% late Thursday. It had been at 0.57% just on Monday. It climbed through the week after a couple reports on inflation came in higher than expected and after the U.S. Treasury auctioned off more bonds to help cover the government’s huge deficit.
In Europe, stocks trended lower after Britain said it was imposing a 14-day quarantine on travelers from France, which said it would respond in kind. Tourism and travel stocks were hit particularly hard, such as budget airlines easyJet and IAG.
France’s CAC 40 dropped 1.6%, while Germany’s DAX lost 0.7%. The FTSE 100 in London fell 1.5%. Asian markets were mixed after China reported its factory output rose 4.8% in July from a year earlier, on par with June’s increase. Retail sales fell 1.1%, as consumers remain cautious.
Japan’s benchmark Nikkei 225 gained 0.2%, and South Korea’s Kospi slipped 1.2%. Hong Kong’s Hang Seng dipped 0.2% after gyrating earlier in the day, while stocks in Shanghai gained 1.2%. Benchmark U.S. crude oil slipped 23 cents to settle at $42.01 per barrel. Brent crude, the international standard was down fell 16 cents to $44.80.
Gold for delivery in December fell $20.60 to settle at $1,949.80 per ounce.
AP Business Writer Yuri Kageyama contributed