Following the S&P 500 and Nasdaq’s six-day winning streaks, Wall Street’s major indexes fell on Friday as positive economic data soothed fears about a recession and negative housing data soured investor mood.
Data indicating a steep decline in single-family homebuilding in the United States in July put some pressure on stocks and suggested that the housing market was still in a depressed state at the beginning of the third quarter.
Energy was the worst-hit sector, mirroring lower crude oil prices, with nine of the eleven major S&P 500 sectors trading lower. A bearish U.S. jobs report and the yen carry trade caused the benchmark index to decline earlier this month, but better-than-expected data eased concerns of a severe slowdown in the largest economy in the world.
Sky Is Not Collapsing
Data this week on consumer and producer prices in the United States showed that inflation was slowing down at a rate that would allow the Federal Reserve of the United States to begin its monetary easing cycle next month with a 25 basis point rate drop. “This week’s data indicates that the sky is not collapsing, contrary to what some investors had begun to worry,” stated Mike Reynolds.
For additional hints on the direction of rate cuts, market investors will be examining the minutes from the Fed’s most recent policy meeting as well as Fed Chair Jerome Powell’s assessment of the U.S. economy at the Jackson Hole symposium, an annual meeting of international central bankers, next week.
The Dow was on track for its best weekly performance since December, while the S&P 500 and the Nasdaq were poised for their best weeks since October. The University of Michigan will release its August consumer sentiment poll later today at approximately 10:00 a.m. ET (1400 GMT).
Central bank authorities should be cautious about maintaining tight policies since the U.S. economy is not overheating, according to Chicago Fed chief Autan Goolsbee, in an interview with National Public Radio.
Reduction In Cartons And Containers
The S&P 500 lost 12.63 points, or 0.23%, to 5,530.59, the Nasdaq Composite lost 52.02 points, or 0.30%, to 17,542.48, and the Dow Jones Industrial Average slid 53.74 points, or 0.13%, to 40,509.32 at 9:35 a.m. ET.
Applied Materials had a decline of more than 3% after reporting solid earnings ahead of schedule. The manufacturer of chip equipment predicted fourth-quarter revenue that was marginally higher than Wall Street projections.
Amcor’s U.S.-listed shares fell 4% following the packaging company’s announcement of a higher-than-expected drop in fourth-quarter sales, which was attributed to a reduction in demand for its cartons and containers. Due to the fact that many investors are on summer vacation, U.S. stock trading volume has often been below its 20-day moving average during the last six sessions.
On the NYSE and the Nasdaq, declining issues outnumbered advancers by a ratio of 1.25 to 1 and 1.23 to 1, respectively. The Nasdaq Composite recorded 14 new highs and 28 new lows, while the S&P 500 achieved two new 52-week highs and no new lows.
