The S&P 500 pulled back from a record high on Friday as a tech-stock retreat and weaker-than-expected retail sales data weighed on sentiment. Middle East tensions added to investor caution, even as the index stayed on track for its third straight weekly gain.
Tech stocks dragged Wall Street lower on Friday, a day after helping push the S&P 500 to a record high in the previous session. Investors weighed the weak retail sales print alongside developments in the Middle East.
Tech selloff pulls Nasdaq lower
The S&P 500 information technology index dropped 0.5%. Broadcom took the biggest jolt, down 5.5%. Applied Materials fell 5.2%, even after the chip equipment maker forecast fourth-quarter revenue above Wall Street estimates. The Philadelphia SE Semiconductor index also fell 1%.
Data storage companies defied the broader decline, though. SanDisk and Western Digital advanced 5.7% and 1.4%, respectively. Energy stocks on the S&P 500 rose 1.5%, tracking a rise in oil prices. Reddit surged more than 12% after being named a new addition to the S&P 500, effective August 18.
Indexes still on pace for a weekly gain
At 12:14 p.m. ET, the Dow Jones Industrial Average fell 122.05 points, or 0.23%, to 53,717.94. The S&P 500 lost 12.71 points, or 0.16%, to 7,786.28. The Nasdaq Composite lost 101.63 points, or 0.38%, to 26,701.40. Financial and healthcare stocks declined, pulling the Dow lower.
Even so, both the S&P 500 and the Nasdaq were on track for their third consecutive weekly gain, the longest winning streak since early April, as strong earnings and reduced bets on interest rate hikes after benign data lifted sentiment. The July retail sales reading came in weaker than expected, after an unrevised 0.2% gain in June, the Commerce Department's Census Bureau said.
Middle East tensions cloud the outlook
Rising energy prices linked to the conflict, along with limited guidance from Fed Chair Kevin Warsh, left investors scrutinizing economic data for clues on growth. Transit through the Strait of Hormuz appeared to have come to a near standstill after two more ships were attacked, and the U.S. said it could maintain a naval blockade of Iran indefinitely.
The University of Michigan's preliminary consumer sentiment survey came in at 51 in August, below expectations of 54.5, according to economists polled by Reuters. Advancing issues outnumbered decliners by a 1.13-to-1 ratio on both the NYSE and the Nasdaq.
Source: Investing.com
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