Wall Street retreats as retail sales growth slows

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August 14, 2020

The S&P 500 slipped further away from record levels on Friday as domestic retail sales growth slowed in July, adding to worries about a wobbly post-pandemic economic recovery in the absence of a new U.S. fiscal stimulus bill.

Technology led declines among the 11 major S&P indexes, while the real estate sector — commonly considered defensive — 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.

But the benchmark index has struggled to top its all-time high of 3,393.52, also hit on Feb. 19, as the domestic economy continues to struggle.

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.

“The state of the consumer and the ability and the interest to spend is going to be key in self sustaining the economic recovery,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

A deadlock between top Democrats and the White House over more stimulus measures to support the economy has also been a major point of focus.

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

At 10:00 a.m. ET, the Dow Jones Industrial Average was down 71.07 points, or 0.25%, at 27,825.65, the S&P 500 was down 0.90 points, or 0.03%, at 3,372.53, and the Nasdaq Composite was down 3.31 points, or 0.03%, at 11,039.19.

Applied Materials Inc rose 6.9% after it forecast fourth-quarter revenue above analysts’ estimates following a rebound in demand for chip equipment and services.

The Philadelphia chip index rose 0.8%.

Electric car maker Tesla rose 2.3% 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 6.2% after its streaming service iQIYI said it was being probed by the U.S. Securities and Exchange Commission.

Shares of iQIYI dropped 10.2%.

Declining issues outnumbered advancers 1.54-to-1 on the NYSE and 1.69-to-1 on the Nasdaq.

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The S&P index recorded six new 52-week highs and no new low, while the Nasdaq recorded 25 new highs and five new lows.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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Wall Street retreats as retail sales growth slows

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