Stocks dip; S&P 500 on pace for first down week in 4
Two men walk past a screen showing the Hang Seng Index at a bank in Hong Kong on Friday, May 12, 2017. (AP / Kin Cheung)
Stan Choe, The Associated Press
Published Friday, May 12, 2017 12:52AM EDT
Last Updated Friday, May 12, 2017 4:08PM EDT
NEW YORK -- Shares of department stores sank again Friday, hurt by more evidence that shoppers are turning away from them. A drop in Treasury yields also put pressure on bank stocks, and the weakness helped pull the Standard & Poor's 500 index down modestly.
The S&P 500 is on pace for its first weekly loss in the last four, though it remains close to its record.
KEEPING SCORE: The S&P 500 fell nearly 5 points, or 0.2 per cent, to 2,390 as of 3:08 p.m. Eastern time and is on pace for a 0.4 per cent dip for the week. It nevertheless remains within half a per cent of its record, set on Wednesday.
The Dow Jones industrial average fell 32 points, or 0.2 per cent, to 20,887, and the Nasdaq composite rose 3 points, or 0. 1 per cent, to 6,119. Small-company stocks fell more than the rest of the market. The Russell 2000 index lost 5 points, or 0.4 per cent, to 1,385.
NOSEDIVE: Nordstrom plunged $4.81, or 10.4 per cent, to $41.40, the biggest loss in the S&P 500, after a key sales figure weakened last month by more than analysts expected. It joined a long list of other department-store chains that have reported discouraging results recently, as their customers increasingly head online.
J.C. Penney fell 73 cents, or 13.8 per cent, to $4.56 after it reported a loss for its latest quarter and weaker revenue than analysts expected.
ELSEWHERE, WALLETS OPEN UP: Outside of department stores, shoppers picked up their spending last month, and retail sales rose 0.4 per cent from March. That was below economists' expectations, but it's an acceleration from weak levels registered earlier in the year. It also may be an indication that the economy will indeed pick up from its early-year torpor, as many economists predict.
CALM DAY: It was another relatively listless day of trading for the broad market, which has been at its calmest in more than two decades by some measures. The S&P 500 was on pace to move by less than 0.5 per cent for the 13th straight day, its longest such streak since 1995.
"It's extremely calm, which always makes us a little nervous," said Eric Marshall, portfolio manager at Hodges Funds. "We're in a very narrow market and a very thin market: It's hard to buy things, and it's hard to sell things because the amount of trading volume out there has slowed down in recent weeks."
Such placid trading has come on the heels of a stronger-than-expected reporting season for corporate profits and some encouraging data on the U.S. economy. It also comes despite a spate of political jolts, including concerns about how successful Republicans in Washington will be at pushing through the pro-business changes that many investors are expecting.
PRICES RISE: Consumer prices also picked up a bit of momentum in April. Prices rose 0.2 per cent last month, following a drop of 0.3 per cent in March, as energy prices climbed higher. But after excluding energy and food prices, inflation was weaker last month than economists were expecting.
The Federal Reserve is paying close attention to inflation as it raises interest rates off their record lows, particularly where it is after excluding energy and food prices, which can be volatile.
YIELDS: Bond yields dropped as Treasury prices rose. The yield on the 10-year Treasury fell to 2.32 per cent from 2.40 per cent late Thursday. The two-year yield dropped to 1.29 per cent from 1.34 per cent, and the 30-year yield fell to 2.99 per cent from 3.03 per cent.
CASCADE EFFECT: Bank stocks have recently been trading in the opposite direction of Treasury yields, because a pickup in interest rates would allow banks to make bigger profits from making loans.
Financial stocks in the S&P 500 fell 0.5 per cent, second-most among the 11 sectors that make up the index.
On the winning side were utilities, whose relatively big dividends look more attractive when bonds are paying less in interest.
HEALTHY GAIN: U.S.-listed shares of AstraZeneca jumped $2.90, or 9.3 per cent, to $34.03 after the company reported results from a trial of a lung-cancer treatment.
MARKETS ABROAD: In Europe, the French CAC 40 rose 0.4 per cent, the German DAX gained 0.5 per cent and the FTSE 100 in London picked up 0.7 per cent. In Asia, Japan's Nikkei 225 fell 0.4 per cent, South Korea's Kospi fell 0.5 per cent and the Hang Seng in Hong Kong ticked up by 0.1 per cent.
GROUP OF SEVEN: Finance ministers from seven of the world's advanced economies are gathering in Italy this weekend. The officials from Britain, Canada, France, Germany, Italy, Japan and the United States are expected to discuss ways to promote economic growth. Also on the agenda: U.S. Treasury Secretary Steven Mnuchin will explain Trump's plans to cut business taxes and regulations and outline the administration's economic policies, including its stance on trade.
COMMODITIES: Benchmark U.S. crude oil rose a penny to settle at $47.84 a barrel. Brent crude, the international standard, rose 7 cents to $50.84 a barrel.
Natural gas rose 5 cents to $3.42 per 1,000 cubic feet, heating oil was close to flat at $1.49 per gallon and wholesale gasoline rose a penny to $1.58 per gallon.
Gold rose $3.50 to settle at $1,227.70 per ounce, silver gained 14 cents to $16.40 per ounce and copper added 2 cents to $2.52 per pound.
CURRENCIES: The euro rose to $1.0923 from $1.0866 late Thursday. The dollar slipped to 113.34 Japanese yen from 113.88 yen, and the British pound slipped to $1.2879 from $1.2890.