Stocks Drift a Bit Lower
NEW YORK (AP) -- Stocks are drifting a bit lower in early Friday trading on Wall Street after a report showed that sales for U.S retailers strengthened again last month, but by less than economists expected.
The S&P 500 was down 0.1%, as the market takes a pause after nearly erasing the last of the steep losses caused by the coronavirus pandemic. In each of the two prior days, the index briefly crossed above its record closing high, which was set in February, and it's now 0.5% below the record.
More stocks across Wall Street were falling than rising, but the moves were mostly modest. The Dow Jones Industrial Average was down 64 points, or 0.2%, at 27,830, as of 10:08 a.m. Eastern time, while the Nasdaq composite dipped 0.2%.
Consumer spending is the main locomotive for the U.S. economy, so investors paid close attention to the report showing that 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 gargantuan plunge in the spring, but it was a sharp slowdown from the 8.4% growth in the prior month. It also fell short of the 2% growth that economists were expecting.
Economists say consumer spending could be under more pressure going forward after several U.S. government programs to aid the economy expired, 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.
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 1.8%, while Germany's DAX lost 0.9%. The FTSE 100 in London fell 1.8%.
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 a penny to $42.23 per barrel. Brent crude, the international standard was down 0.1% at $44.91.