U.S. Stocks Edge Lower From Records Following Lackluster Data

(Bloomberg) --U.S. stocks slipped, as lackluster data offered little incentive for investors to push equities higher after the three main benchmarks reached records on Thursday.

The S&P 500 Index fell 0.1 percent to 2,183.64 at 10:04 a.m. in New York, after yesterday closing at an all-time high for the ninth time in a month. The Dow Jones Industrial Average lost 20.20 points, or 0.1 percent, to 18,593.32, and the Nasdaq Composite Index declined 0.1 percent. All three gauges closed at records yesterday for the first time since 1999.

“The market has really been complacent all summer,”said Tom Siomades, head of Hartford Funds Investment Consulting Group in Radnor, Pennsylvania, whose firm oversees $76 billion. “What we've seen is not a preponderance of good news, it's just been a lack of any real bad news. Today's numbers missed across the board but where's the reaction? People have been lulled to sleep here.”

A report today showed sales at U.S. retailers were little changed in July as Americans flocked to auto dealers at the expense of other merchants. The stalling of purchases followed a gain in June that was stronger than initially estimated. Excluding cars, sales retreated the most since the start of the year. Separate data showed wholesale prices unexpectedly fell in July by the most in almost a year, a sign inflation is likely to stay muted.

Better-than-projected corporate results, improving economic data and optimism central banks will stay supportive of growth have sent equities to a succession of fresh peaks in the past month. The gains are getting harder for strategists to ignore. Wells Fargo & Co. became the second of 21 firms tracked by Bloomberg to raise its target for the S&P 500 since the measure surged past the group's average year-end prediction a month ago. The benchmark is up less than 0.1 percent for the week.

With the earnings season approaching its end, investors are turning their focus to economic data to gauge the vitality of U.S. growth and the Federal Reserve's next policy steps. In addition to July retail sales and producer prices, a report showed consumer confidence rose less than forecast in August, reflecting a pullback in views on personal finances among younger Americans.

The University of Michigan's preliminary index of sentiment climbed to 90.4 from a three-month low of 90 in July. The median projection in a Bloomberg survey called for a reading of 91.5, with estimates ranging from 89 to 93.1.

After Friday's data, traders moved back their bets on the timing of an interest-rate increase. The first month with at least even odds of higher borrowing costs is now May 2017, compared with March before the retail sales and wholesale prices reports.

With more than 90 percent of S&P 500 members through with reporting quarterly results, 78 percent exceeded profit forecasts while 56 percent beat on sales. Analysts predict earnings for the group fell 2.7 percent, and estimates for the current quarter recently went negative. Profits are now expected to fall 0.8 percent in the quarter ending in September, compared with a 1.8 percent gain forecast before the earnings season began four weeks ago, according data compiled by Bloomberg.

“We have reasonably good news from the earnings season and the economy recently,” said Otto Waser, head of investment research at R&A Group Research and Asset Management AG in Zurich. “There are no large investor worries, and this has kept markets relatively stable. When the S&P managed to reach a fresh all-time high in July, we thought that was important, and now we're getting some confirmation.”