A late slide erases gains for US indexesSunday, October 18, 2020
Wall Street closed out a choppy week of trading with more of the same Friday as a late-afternoon stumble led US stock indexes to a mixed finish.
The S&P 500 ended the day just a fraction of a point higher after a burst of selling erased a 0.9 per cent gain. Despite a three-day stretch of losses, the benchmark index still managed to finish higher for the week, its third straight weekly gain.
Big tech and energy companies fell, while health care and industrial stocks rose. The Dow Jones Industrial Average also eked out a gain, while the Nasdaq composite posted its fourth straight loss. Treasury yields were flat.
The market had been up for much of the day after the government reported that retail sales rose in September for the fifth straight month. That report appeared to overshadow new data which showed that US industrial production had its weakest showing last month since the spring.
The market's late-day fade capped a week of volatility for stocks, as companies began reporting their third-quarter results and traders' hopes for a new round of economic stimulus from Washington dimmed.
Stocks have been mostly climbing this month, but trading became choppy this week, as ongoing talks between Democrats and Republicans on an economic stimulus package failed to deliver results. Investors have been hoping that Washington would provide more financial support for the economy since July, when a US$600-a-week extra benefit for the unemployed expired.
Traders have been watching economic data closely to see whether the loss of that beefed-up unemployment aid would lead to an overall pullback in spending. On Thursday, the Government said the number of Americans seeking unemployment aid increased last week to 898,000, a historically high level that underscores how the economy continues to be hobbled by the pandemic and recession that erupted seven months ago.
Friday's retail sales report provides some encouragement, suggesting Americans' appetite for spending remained solid last month. The Commerce Department said retail sales rose 1.9 per cent in September, the fifth straight monthly increase.
Other data point to persistent weakness in the economy. The Federal Reserve said Friday that US industrial production fell 0.6 per cent last month, the weakest showing since April's 12.7 per cent skid amid widespread business shutdowns due to the pandemic. Economists had been expecting an increase.
A surge in new coronavirus infections in Europe, the Americas and parts ofAsia is also giving traders reason to turn cautious. The new caseloads prompted governments in France and Britain to impose new restrictions aimed at containing the outbreak which contributed to some of the selling in the market earlier this week.
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