Stocks Sink, Post Second Weekly Decline
NEW YORK (TheStreet) -- Major U.S. stock markets slipped Friday to post back-to-back weekly declines as some encouraging economic indicators were outweighed by the possibility that the Federal Reserve will begin to curb its stimulus program before the end of the year.
The S&P 500 was off 0.33% to 1,655.83, putting the index down 3% the past two weeks.
Nordstrom (JWN) was the S&P 500's biggest decliner, falling off 4.9% to $56.43 after the department-store operator slashed its full-year earnings and revenue guidance in the face of weaker same-store sales.
The Dow Jones Industrial Average dropped 0.2% to 15,081.47. The blue chip index lost 2.23% this week. TheNasdaq closed down 0.09% to 3,602.78. The tech-heavy index closed off 1.57% for the five-day period."The market is likely to stay choppy for most of the session as the VIX index and yield curve are eyed," Peter Cardillo, chief market economist at Rockwell Global Capital in New York said in an email. "Nonetheless, today's good economic news will once again be overshadowed by weak technical and geopolitical factors." Housing starts rose to a seasonally adjusted annual rate of 896,000 in July from an upwardly revised 846,000 in June, the Census Bureau reported Friday. The report also showed building permits increasing in the period to an annualized pace of 943,000 from an upwardly revised 918,000. Economists, on average, were expecting housing starts to come in at 900,000 and building permits of 945,000 in July. The bid for homebuilder stocks increased after the housing market report, with shares racking up some of the biggest gains in the S&P. PulteGroup (PHM) popped 2.33% to $16.28 and Lennar (LEN) tacked on 1.8% to $33.88. Anadarko Petroleum (APC)was the top performer on the S&P as the Economic Times reported that ONGC Videsh bid for the company's 10% stake in Rovuma Basin. Bank of America Merrill Lynch has said Anadarko's stake may be worth $9 billion. Shares popped 1.6% to $91.51. Non-farm business productivity came in better-than-expected after rebounding in the second quarter, according to the Bureau of Labor Statistics. Productivity edged up 0.9%, up from a downwardly revised negative 1.7% in the first quarter. Expectations were for a rise of 0.6% in the second quarter. The agency also reported a greater-than-expected 1.4% rise in unit labor costs, versus an upwardly revised negative 4.2%. Economists were expecting a 1.2% rise for the second quarter. The University of Michigan consumer sentiment index dipped to 80 in August from 85.1 in July. Economists were expecting a rise to 85.5. While the pullback in consumer sentiment in early August is surprising given the apparent improvement in the labor market as signaled by the decline in initial jobless claims reported Thursday, the data doesn't look so bad after being put into context, according to John Ryding and Conrad DeQuadros, economists at RDQ Economics in New York. "First, large moves in the index are quite common," Ryding and DeQuadros said in a note. "Thus far in the recovery, there have been six larger monthly declines in overall consumer sentiment and yet the recovery plodded on regardless. Second, the level of confidence is still somewhat higher than the 76.5 average reading for last year and the decline in August is from July's six-year high reading." Investors also were also closely monitoring risks associated with the rising civil unrest in Egypt as the country remains violently polarized in the wake of the ouster of President Mohammed Morsi. The benchmark 10-year Treasury was down 16/32, raising the yield to 2.832%. The 10-year yield hit a fresh two-year high Thursday after evidence of an improving labor market that was reported Thursday and data showing a rise in U.S. consumer price inflation in July bolstered views that the Fed has room to begin tapering this year. Follow @atwtse -- Written by Andrea Tse and Joe Deaux in New York >To contact the writer of this article, click here: Andrea Tse.>
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