Stocks slipped lower on Friday, a day after the largest drop on Wall Street in nearly two months set major indexes on course for their second consecutive weekly decline.
In early trading the Standard Poor’s 500-share index was down 0.2 percent, the Dow Jones industrial average fell 0.1 percent and the Nasdaq composite was unchanged.
Investors are concerned the economic recovery is slower than they had hoped as corporate revenue growth has disappointed even as companies’ bottom-lines have hit the mark.
“We haven’t seen the revenue growth the market was anticipating,” said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City.
“We are unlikely to see a large-scale correction in the market right now, but it certainly is losing the momentum that took it to strong highs earlier this year,” he said.
From Wal-Mart and Gap to Macy’s and McDonald’s, chains that cater to middle- and lower-income Americans are feeling the pinch of an uneven economic recovery.
Nordstrom, the luxury department store chain, reported lower-than-expected revenue in its second quarter Thursday, prompting the company to trim its full-year sales and profit forecasts. Its shares fell 2.9 percent.
Across the Atlantic, surprisingly strong growth in France and Germany dragged the euro zone out of an 18-month recession and data showed Britain’s recovery gathering momentum.
Growth in China’s giant economy also appears to be stabilizing, and Japanese exports for July due on Monday are forecast to show the fastest growth in over three years.
“The global economy is improving and even if the Fed does taper in September they are unlikely to move in a significant fashion, so the caution is perhaps overdone,” said Chris Beauchamp, market analyst at IG.
In Europe, stock markets were generally lower, with the FTSEurofirst 300 index of blue chips 0.2 percent lower. Asian markets ended the session down, with Japan’s Nikkei off 0.8 percent, and China’s Shanghai composite 0.6 percent lower.
Expectations that the Federal Reserve would scale back its bond buying next month drove the yield on the benchmark 10-year Treasury note up to 2.78 percent in Europe, sent the dollar down 0.1 percent against a basket of currencies and the euro up to $1.3372.
“Given that the 10-year U.S. yields are headed towards 3 percent, we think the general direction is for a stronger dollar,” said Tom Levinson, FX strategist at ING.
Data on Friday showed housing starts and permits for future home construction in the United States rose less than expected in July, suggesting that higher mortgage rates could be slowing the housing market’s momentum.
United States nonfarm productivity rose in the second quarter after a surprise decline in the first one, separate data showed.
Pandora Media shares jumped 6.7 percent following a bullish call on the stock from Goldman Sachs.
Article source: http://www.nytimes.com/2013/08/17/business/daily-stock-market-activity.html?partner=rss&emc=rss
