Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 25, 2016. REUTERS/Brendan McDermid
NEW YORK: US stocks were lower in early afternoon trading on Tuesday following a drop in consumer stocks, but the three major indexes were on track to end higher for May, as investors mulled over economic data for clues regarding the timing of a rate hike.
Stronger-than-expected April consumer spending data on Tuesday bolstered Federal Reserve Chair Janet Yellen’s stance on Friday that a rate hike in the coming months would likely be appropriate given an improvement in the economy.
However, the impact of the strong spending data was somewhat muted after a Conference Board report showed that the consumer confidence index slipped to 92.6 this month from 94.7 in April.
Seven of the 10 major S&P sectors were lower, with the consumer staples index’s 0.57% drop leading the decliners.
Investors now await the crucial US jobs data on Friday.
The Fed meets next on June 14-15.
“I think this is a classic wait-and-see the data kind of week,” said Philip Blancato, chief executive officer of Ladenburg Thalmann in New York.
“So if the (jobs) data comes in as strong as I think, then you could be seeing a pretty significant pump to the expectations for the Fed to be able raise rates in June.”
At 12:47pm ET (1647 GMT) the Dow Jones Industrial Average was down 88.79 points, or 0.5%, at 17,784.43.
The S&P 500 was down 4.33 points, or 0.21%, at 2,094.73.
The Nasdaq Composite was up 4.59 points, or 0.09%, at 4,938.09.
All three indexes were set to end higher for the month, with Nasdaq set to record the biggest gain, while the Dow would barely eke out a gain at current levels.
Apple’s 0.6% fall to US$99.76 was the biggest drag on the S&P and the Nasdaq, while Boeing’s fall of 1.9% pulled down the Dow.
Coca-Cola’s 0.8% drop was the biggest drag on the consumer staples index.
Consumer heavyweights Home Depot and McDonald’s were off almost 1%.
Disney, another Dow component, was down 1.3%. The studio’s latest release, “Alice Through the Looking Glass”, received poor reviews.
Celator Pharma surged 71% to US$29.99 after agreeing to be bought by Jazz Pharma for about US$1.5bil. Jazz Pharma was down 0.3% at US$151.55. Celator was the most traded stock on the Nasdaq.
Advancing issues outnumbered decliners on the NYSE by 1,631 to 1,326. On the Nasdaq, 1,570 issues rose and 1,174 fell.
The S&P 500 index showed 24 new 52-week highs and no new lows, while the Nasdaq recorded 67 new highs and eight new lows. - Reuters
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