US stocks edged lower as lackluster data offered little incentive for investors to push equities higher after the three main benchmarks reached records on Thursday.
Banks were among the bigger drags on Friday as US Treasury yields fell, damping optimism for better earnings on speculation the US Federal Reserve will be in no rush to raise interest rates.
Drugmakers weighed on the healthcare group, while raw-materials fell the most in five weeks. Energy producers rose with crude oil for a second day, and Nordstrom Inc jumped 8 percent to buoy retailers after its quarterly profit beat projections.
The S&P 500 Index fell 0.1 percent to 2,184.05 at 4pm on Friday in New York, after closing at an all-time high on Thursday for the ninth time in a month. The NASDAQ Composite Index eked out a 0.1 percent climb to its fourth record in six days, while the Dow Jones Industrial Average lost 37.05 points, or 0.2 percent, to 18,576.47. About 5.5 billion shares traded hands on US exchanges on Friday, the lowest in four months and 21 percent below the three-month average.
“The market has really been complacent all summer,”said Tom Siomades, head of Hartford Funds Investment Consulting Group in Radnor, Pennsylvania, whose firm oversees US$76 billion. “What we’ve seen is not a preponderance of good news, it’s just been a lack of any real bad news. Today’s numbers missed across the board, but where’s the reaction? People have been lulled to sleep here.”
A report today showed sales at US retailers were little changed last month as Americans flocked to auto dealers at the expense of other merchants.
The stalling of purchases followed a gain in June that was stronger than initially estimated.
Excluding cars, sales retreated the most since the start of the year.
Separate data showed wholesale prices unexpectedly fell last month by the most in almost a year, a sign inflation is likely to stay muted.
Better-than-projected corporate results, improving economic data and optimism central banks will stay supportive of growth have sent equities to a succession of fresh peaks in the past month, while also extending valuations. The S&P 500’s price relative to future earnings has climbed to 18.6, the highest since 2002.
The gains are also getting harder for strategists to ignore. Wells Fargo & Co became the second of 21 firms tracked by Bloomberg to raise its target for the S&P 500 since the measure surged past the group’s average year-end prediction a month ago. The benchmark rose less than 0.1 percent for the week.
The advance to records has ushered in a deepening level of calm. The CBOE Volatility Index slipped 1.1 percent Friday to 11.55, after briefly touching a two-year low. The measure of market turbulence known as the VIX snapped the longest stretch of weekly declines in eight years.
Meanwhile, bets against the rally have been punished as a Goldman Sachs Group Inc basket of most-shorted shares capped a seventh consecutive weekly climb, its longest since 2009.
With the earnings season approaching its end, investors are turning their focus to economic data to gauge the vitality of US growth and the US Federal Reserve’s next policy steps.
In addition to July retail sales and producer prices, a report showed consumer confidence rose less than forecast in August, reflecting a pullback in views on personal finances among younger Americans.
After Friday’s data, traders’ bets on the timing of an interest-rate increase have fluctuated, with the first month showing at least even odds of higher borrowing costs volleying between March and May next year.
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