May 16, 2021

Little Change in Wall Street Indexes

For the first time since November, the Standard Poor’s 500-stock index posted a loss in consecutive weeks. Investors seemed willing to take money off the table after several months of gains.

The S. P. 500 ended May up 2.1 percent, its seventh straight month of gains — the longest streak since 2009. The index is up 14.3 percent in 2013, scoring its best five-month start to a year since 1997. Over the last seven months, it has climbed 15.5 percent.

Trading has been volatile for most of the week on concerns that the Federal Reserve will retreat from its monetary policy, the main engine behind the strong rally in equities this year.

Data on Friday pointed to a soft American economy but failed to quell speculation about possible action by the Fed. Consumer spending fell in April for the first time in almost a year, and inflation pressures were subdued.

But a separate report showed manufacturing rose more than expected in May, reflecting an expansion of business activity after a contraction in April.

“The economic data we have seen over the last week or so has been quite positive,” said Peter Kenny, chief market strategist at Knight Capital in Jersey City. He added: “It also speaks to the fact that tapering or a shift in monetary policy is more likely — the more positive it is. As a result, people are more than happy to ring the register — you never go broke ringing the register on a winning trade.”

Selling accelerated near the market’s close with the rebalancing of the MSCI indexes at the end of the day. Credit Suisse forecast $19 billion in total trading as a result of the rebalancing, with $15 billion related to developed markets.

“What’s happened in the last hour here, there’s some index and month-end rebalancing that accelerated the downturn,” said Bucky Hellwig, senior vice president of BBT Wealth Management in Birmingham, Ala.

The Dow Jones industrial average slid 208.96 points, or 1.36 percent, to close at 15,115.57. The S. P. 500 lost 23.67 points, or 1.43 percent, to finish at 1,630.74. The Nasdaq composite fell 35.39 points, or 1.01 percent, to end at 3,455.91.

For the week, the Dow fell 1.2 percent, the S. P. 500 lost 1.1 percent, and the Nasdaq dipped 0.1 percent. For May, the Dow rose 1.9 percent and the Nasdaq gained 3.8 percent.

The stock market’s advance this year has come largely on supportive monetary policies from central banks around the world, which helped the markets ignore the Wall Street adage of “sell in May, go away” — a historical trend of seasonal weakness. In May 2012, the S. P. 500 fell 6.3 percent.

Energy and health care stocks were among the session’s worst performers, with Pfizer and Exxon Mobil the two biggest drags on the S. P. 500. Pfizer lost 3.6 percent to $27.23, while the S. P. health care sector index dropped 2.2 percent. Exxon Mobil slid 1.8 percent to $90.47. The S. P. energy sector index lost 2 percent.

Palo Alto Networks shares lost 10.8 percent to $48.52 after the company gave an outlook that was below expectations.

The benchmark 10-year Treasury note fell 4/32 on Friday, to 96 19/32, as its yield rose to 2.13 percent, from 2.12 percent late Thursday evening.

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