Stocks dipped on Friday as the S&P 500 attempted once more to reach its February record high.
The S&P 500 slid 0.2% and the Nasdaq Composite was down by 0.5%. The Dow Jones Industrial Average pulled back 42 points, or 0.2%.
Shares of Facebook and Amazon dropped 0.8% and 1.2%, respectively. Alphabet shares dipped 0.9% and Apple traded 1.4% lower. Stocks benefiting from the economy reopen rose broadly, however. United Airlines, Delta and American were all up more than 1%. Carnival Corp and Norwegian Cruise Line rose 2.5% and 2.2%, respectively. Nordstrom shares advanced more than 7%.
The S&P 500 entered Friday’s session just 0.6% below its intraday record high. The broader market index has also traded above its record closing high several times this week before falling short of the milestone.
“With the S&P 500 failing to puncture its February 2020 highs despite a few attempts this week, many observers believe it’s a clear sign of exhaustion,” Frank Cappelleri, executive director at Instinet, said in a note. Cappelleri noted three Demark indicators — measures used by technicians to gauge market momentum — have seen sell signals pop up over the past 10 days.
“While these don’t always pinpoint a top and/or precede a huge drawdown, over the last three years, the S&P 500 eventually has pulled back to where these signals first hit every time,” Cappelleri said.
This week’s back-and-forth action came as investors rotated between the major tech stocks — Facebook, Amazon, Apple, Alphabet, Netflix and Microsoft — and shares of companies that would benefit from the economy reopening.
If the S&P 500 breaks out for a fresh record, it would be the index’s fastest recovery from a 30% drop in its history, according to data compiled by Ned Davis Research.
Retail sales data mixed, stimulus talks in focus
Traders also pored over over mixed economic data and looked to Washington for clues on further coronavirus stimulus.
Retail sales for July rose 1.2%, the Commerce Department said. That’s below a Dow Jones estimate of 2.3%. Excluding autos, however, retail sales rose 1.9% to top a forecast of 1.2%.
In Washington, lawmakers seem unable to move forward with a coronavirus stimulus bill.
House Speaker Nancy Pelosi, D-Calif., has said she will not restart talks with Republicans on the matter until they increase their aid offer by $1 trillion. White House economic advisor Larry Kudlow also told CNBC’s “Squawk on the Street” that the administration and Democrats were at a “stalemate.”
“Given the current fiscal stalemate, it is extremely unlikely that consumers receive any additional fiscal support in August. Needless to say, the outlook for September is highly dependent on fiscal policy,” said Aneta Markowska, chief economist at Jefferies, in a note.
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