Wall Street Drifts Following Mixed Data On Global Economy

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NEW YORK  — Stocks are drifting again on Wall Street Friday, following a mixed set of data on the economy, as a record-breaking but wishy-washy week of trading closes out.

The S&P 500 was virtually unchanged after meandering between small gains and losses in the first 45 minutes of trading. It followed up on losses across Europe after reports there indicated a slowdown in its economies. Asian stocks climbed, while Treasury yields were relatively steady.

The Dow Jones Industrial Average was up 47 points, or 0.2%, at 27,786, as of 10:15 a.m. Eastern time, and the Nasdaq composite was close to flat.

The S&P 500 returned to a record high this week, wiping out the last of its historic losses from the coronavirus pandemic, but moves in the market have nevertheless been very muted. The index is on pace for a 0.3% gain for the week, as momentum has slowed recently after it roared back from its nearly 34% plunge from late February into March. It’s barely 0.2% below the record close set on Tuesday.

Investors are still waiting for more clarity on several fronts, which could drive the next big move up or down.

The economy has shown some signs of stalling recently, with Friday’s reports from Europe the latest reminder that a steady rise in coronavirus cases may be undermining growth and that the outlook for jobs remains dim. They follow a U.S. report from Thursday that showed that the number of workers applying for unemployment benefits picked up again last week.

But the picture remains mixed. A separate report on Friday from IHS Market on Friday said preliminary data suggests output from the U.S. private sector is at an 18-month high. Sales of previously occupied homes were also stronger in July than economists expected, meanwhile.

Those reports helped the U.S. stock market and Treasury yields recover from declines earlier in the morning.

The Federal Reserve is continuing to prop up markets and the economy by keeping interest rates at nearly zero and buying reams of bonds. But stimulus from Congress has lapsed, and Democrats and Republicans on Capitol Hill continue to haggle.

Investors say the economy and markets need another round of big support from Congress for the recovery to continue.

“Ultimately, it will take some combination of bad data, bad markets and good politics to break the impasse,” economist Ethan Harris wrote in a BofA Global Research report. “Meanwhile, every passing week without meaningful legislation lengthens the mini-recession. This is not the kind of August break this economy needs.”

Beyond Capitol Hill, investors are also waiting for the latest developments in the rising tensions between the world’s two largest economies.

China’s Commerce Ministry on Thursday said that Chinese and U.S. trade envoys will hold a meeting by phone “in the near future” to discuss an agreement aimed at resolving their tariff war. No details on timing were given. White House economic adviser Larry Kudlow said the talks were part of the process of implementing the U.S.-China trade deal.

The yield on the 10-year Treasury was holding steady at 0.64% after sitting at 0.62% earlier in the morning.

In European stock markets, Germany’s DAX slipped 0.7%. France’s CAC 40 fell 0.7%, while the FTSE 100 in London lost 0.4%..

Earlier, Asian markets closed higher. Japan’s Nikkei 225 gained 0.2%, South Korea’s Kospi rose 1.3% and Hong Kong’s Hang Seng added 1.3%.

Benchmark U.S. crude oil fell 1.5% to $42.19 per barrel. Brent crude, the international standard, lost 1.7% to $44.14 per barrel.

By STAN CHOE - Aug 21. 2020 - 10:25 AM ET

AP

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AP Business Writer Yuri Kageyama contributed.

 
 

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