dpTraders work on the floor of the New York Stock Exchange.
NYSE
The S&P 500 slid on Friday after a record-setting session, though the benchmark still notched its third consecutive weekly advance.
The broad market index closed down 0.2% to end the day at 7,785.76, while the Nasdaq Composite shed 0.3% to 26,729.16. The Dow Jones Industrial Average slipped 107.58 points, or 0.2%, to 53,732.41.
For the week, the S&P 500 advanced 0.4%. The Nasdaq also eked out its third weekly gain in a row, ending the week higher by 0.1%. The Dow closed 0.6% lower week to date.
This has been a record-setting week for the S&P 500, with the index on Thursday crossing 7,800 for the first time after hitting an intraday all-time high of 7,816.70. The benchmark also closed at a record in the prior trading day.
SPX 5-day chart
Given the back-to-back gains on the S&P 500 following subdued inflation readings on Wednesday and Thursday, Jay Hatfield of Infrastructure Capital Advisors said Friday’s digestion is a sign of what’s to come for the rest of August and September.
“Today is like the start of that post-earnings flattening out trade,” the CEO said to CNBC.
More than 90% of S&P 500 companies have posted second-quarter results, and earnings growth from the year-earlier period is tracking around 50%, according to FactSet.
Assuming that earnings growth finishes the season at current levels, oil prices continue to trade above $80 as Hormuz stays closed and the Federal Reserve keeps interest rates steady, Hatfield anticipates the S&P 500 reaching 8,100 by year-end.
Investors also examined a weak consumer picture, with retail sales numbers for July showing an unexpected decline on the month. On top of that, consumer confidence in the economy fell in August, reversing course from the improvements seen in June and July.
“One poor month of spending doesn’t necessarily mean the economy is falling off a cliff, but it becomes harder to dismiss alongside disappointing GDP and jobs data. Combined with an in-line inflation reading, that softer data should ease pressure on the Fed to raise rates,” said Bret Kenwell, eToro U.S. investment analyst.
“Still, investors should be careful what they wish for: economic weakness is a steep price to pay to avoid a quarter-point hike, particularly when markets have largely shrugged off that concern and earnings remain resilient. For the economy to stay resilient, consumers will need to do the same,” he added.
