Stocks finished Friday mostly flat as the S&P 500 once again failed to overtake its February record highs. Traders also pored over mixed economic data and looked to Washington for clues on further coronavirus stimulus.
The S&P 500 less than 0.1% while the Nasdaq Composite lost 0.2%. The Dow Jones Industrial Average gained about 35 points, or 0.12%.
Big Tech came under modest pressure in late-day trading as shares of Amazon, Alphabet and Apple shares dropped 0.41%, 0.79% and 0.09%, respectively.
Stocks that would benefit most from economic reopening, however, helped offset some of the losses. United Airlines, Delta and Southwest were each up at least 0.5%. Carnival Corp and Norwegian Cruise Line rose 1.6% and 2.6%, respectively. Nordstrom shares advanced more than 2%.
The Dow and S&P 500 each clinched weekly gains despite Friday’s muted trading action. The S&P 500 added 0.64% for the week, its third straight weekly gain. The Dow advanced 1.8% this week. The Nasdaq, the relative laggard, climbed less than 0.1% since last Friday’s close.
The S&P 500 was also just 0.8% below its intraday record high. The broader market index has traded above its record closing high several times this week but has fallen 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
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. This could drag on for weeks as the Senate is in recess until after Labor Day and House members have already left for the rest of the month.
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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