(Bloomberg) — Stocks fell for a second day as an erosion in U.S. consumer sentiment added to concern about the sustainability of the economic expansion. Crude oil futures and the dollar fluctuated.
Energy and material shares led the S&P 500 lower, erasing a gain posed after a report showed June retail sales topped estimates. The S&P had closed at either a gain or a loss every other day this week. Moderna jumped after the vaccine maker was named to the U.S. equity benchmark. The 10-year Treasury note yield was on pace for a third week of declines.
“The market has been flip-flopping back and forth every day,” Mike Wilson, chief U.S. equity strategist at Morgan Stanley, said in an interview on Bloomberg TV. “Is it going to be growth today or value today and nobody knows because it’s confusing.”
The University of Michigan’s preliminary sentiment index decreased to 80.8 in July from 85.5 the prior month, data released Friday showed. The figure was lower than all estimates in a Bloomberg survey which had a median projection of 86.5.
Investors had turned their attention to corporate earnings, with optimism over resurgent consumer demand tempered by the spread of the coronavirus delta variant. The outlook for stocks was held up by repeated assurances this week from Federal Reserve Chair Jerome Powell that the post-lockdown surge in inflation didn’t yet warrant a tapering of stimulus.
Powell defended the central bank’s accommodative stance for a second time in two days on Thursday in his testimonies to lawmakers. The Fed’s stance underscores a growing divergence among global central banks on their response to growing price pressures. Policy makers from New Zealand to Canada and the U.K. are turning hawkish, making investors wonder how long could the Fed afford to remain dovish.
“Jerome Powell said that the recovery still had a way to go,” said Fiona Cincotta, senior financial markets analyst at City Index. “This is movement in the right direction.”
Oil remains poised for the biggest weekly loss since mid-March as markets face the prospect of extra supplies from the OPEC+ coalition, as the United Arab Emirates and Saudi Arabia repair a rift that has stymied the group’s decision-making process. A stronger dollar has also dimmed the appeal of commodities priced in the U.S. currency this week.
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These are some of the main moves in financial markets:
Stocks
The S&P 500 fell 0.4% as of 2:17 p.m. New York timeThe Nasdaq 100 fell 0.4%The Dow Jones Industrial Average fell 0.5%The MSCI World index fell 0.4%
Currencies
The Bloomberg Dollar Spot Index was little changedThe euro was little changed at $1.1814The British pound fell 0.4% to $1.3777The Japanese yen fell 0.2% to 110.08 per dollar
Bonds
The yield on 10-year Treasuries was little changed at 1.30%Germany’s 10-year yield declined two basis points to -0.35%Britain’s 10-year yield declined four basis points to 0.63%
Commodities
West Texas Intermediate crude rose 0.4% to $71.92 a barrelGold futures fell 0.9% to $1,813.40 an ounce
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