Wall Street lower as retail sales post steep drop in July 

By: The Associated Press//August 17, 2021//

Wall Street lower as retail sales post steep drop in July 

By: The Associated Press//August 17, 2021//

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By DAMIAN J. TROISE AP Business Writer 

Stocks fell in morning trading Tuesday, as data showed the coronavirus pandemic is still holding back the U.S. economy. 

The S&P 500 index fell 0.7 % as of 11:39 a.m. Eastern. The Dow Jones Industrial Average fell 277 points, or 0.8%, to 35,347 and the Nasdaq composite fell 1%. The Russell 2000 index of small company stocks was down 1.6%. 

Investors again shifted money into industries that are traditionally considered less risky and that will hold steady if economic growth slows. A mix of companies that sell food and personal goods, such as General Mills and Procter & Gamble, gained ground. Utilities and real estate companies also held up better than other sectors. 

Technology companies and other sectors that tend to do well in a growing economy slipped. 

Americans cut back on their spending last month as a surge in COVID-19 cases kept people away from stores. Retail sales fell a seasonal adjusted 1.1% in July from the month before, the U.S. Commerce Department said Tuesday. It was a much larger drop than the 0.3% decline Wall Street analysts had expected. 

According to Tuesday’s report, spending fell at stores selling clothing, furniture and sporting goods. At restaurants and bars, spending rose nearly 2%, but the rate of growth has slowed from recent months as the delta variant spread and people worried about dining with others. 

The weak sales report dragged down companies that rely on discretionary spending from consumers. Ralph Lauren fell 3.3% and Whirlpool slipped 4%. 

Bonds were little changed on the news. The yield on the 10-year Treasury note remained at 1.26% from the day before.  

Markets also digested news that Chinese factory output, consumer spending and investment grew more slowly in July than expected. The government blamed flooding in central China and controls on travel and business to fight outbreaks of the coronavirus’s delta variant. 

Shares of Home Depot fell more than 4% after the company told investors that sales were slowing compared to last year, when millions of locked-down Americans undertook home improvement projects. 

Homebuilders fell broadly following a disappointing report from the National Association of Homebuilders. The organization said that builder confidence hit a 13-month low in July as companies worry about supply shortages and high costs. KB Home fell 4.4%. 


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