U.S. stock indexes wavered between small gains and losses in afternoon trading Thursday as the market recovered from an early slide.
Gains in technology and health care stocks outweighed losses in banks and retailers, which slumped following new data from the National Retail Federation showing U.S. holiday season sales were weaker than expected. Separately, the Commerce Department reported that retail sales in December posted their biggest drop since September 2009.
The findings weighed on J.C. Penney and other retailers, but some of those losses were tempered by midafternoon as some economists and analysts questioned whether the government shutdown and resulting delay in collecting the data had made the results less reliable.
Makers of consumer products also took a beating after Coca-Cola said its sales could slow this year because of the strong dollar.
Investors retreated into government bonds, sending benchmark yields lower.
Markets have been moving higher this week as investors became optimistic that new talks could move the U.S. and China closer to a resolution of their trade fight.
The negotiations began Monday, but key figures were set to meet Thursday and Friday in an attempt to avoid an escalation of tariffs that have raised prices for companies and consumers.
The nations are trying to hash out a deal before March 2, when the U.S. has said it would go ahead with penalties on an additional $200 billion of Chinese goods. President Donald Trump has reportedly said he’s willing to let that deadline slide if talks go well.
The holiday sales data and ongoing trade woes come at a time that worries about other global economies are deepening. China’s economy grew at its slowest pace in three decades last year and Europe is contending with a slowdown in growth. Germany, the biggest economy in Europe, recorded no growth in the fourth quarter, just barely avoiding a recession.
KEEPING SCORE: The Dow Jones Industrial Average fell 27 points, or 0.1 percent, to 25,5116 as of 1:58 p.m. Eastern Time. The S&P 500 index was down less than 0.1 percent, while the Nasdaq composite edged up 0.2 percent. Small-company stocks rose. The Russell 2000 index added 0.3 percent.
More stocks rose than fell on the New York Stock Exchange.
Bond prices rose sharply following the weak report on U.S. retail sales. The yield on the 10-year Treasury note fell to 2.66 percent from 2.70 percent late Wednesday. That yield is used to set rates on mortgages and other kinds of loans.
RETAIL RUT: Investors got a double-dose of retail data to consider Thursday. The National Retail Federation, the nation’s largest retail trade group, said Thursday that holiday sales increased a lower-than-expected 2.9 percent as worries about the trade war with China, the government shutdown and stock market turmoil dampened shopper spending in December.
And the Commerce Department said retail sales fell 1.2 percent in December from the previous month. Total retail sales for 2018 rose 5 percent from the previous year.
Retailers had foreshadowed the results in the new reports earlier this month when they disclosed weak holiday season sales.
J.C. Penney fell 2.6 percent and Amazon shed 0.5 percent.
FLAT SODA: Coca-Cola slumped 7.5 percent after the company gave investors a weak outlook as it grapples with rising costs. The beverage giant raised prices in 2018 to counter increasing import and transportation costs.
Coca-Cola said currency fluctuations shaved 10 percent off its fourth quarter profit and it expects a stronger dollar hurt growth in 2019.
LESS TIME: Fossil Group plunged 11 percent after reporting a global sales decline. Comparable sales, a key measure for retailers, fell in every region and for every product category. The watchmaker cited economic weakness in several regions, along with reduced discounting and price-matching as key reasons for the weak quarter.
DISASTER IMPACT: A surge in losses from wildfires and hurricanes helped push American International Group to a fourth-quarter loss. The insurer also reported lower investment income in the quarter. The stock lost 5.8 percent.
LESS ACTION: Casino operators broadly fell on concerns that the growth of online gambling could be stunted by a recent U.S. Department of Justice opinion. MGM Resorts CEO Jim Murren, on a call with investors, decried the DOJ’s opinion for a broader restriction on interstate gambling. The industry is looking to online gambling and sports betting as key drivers of growth.
MGM fell 5.9 percent, Wynn Resorts dropped 2.8 percent and Las Vegas Sands slid 1.6 percent.
SOLID QUARTER: Cisco Systems gained 2.9 percent after the maker of networking equipment announced a big stock buyback and reported solid demand in its latest quarter.
OIL: U.S. benchmark crude rose 0.8 percent to $54.35 a barrel in New York. Brent crude, the standard for international oil prices, gained 1.2 percent to $64.35 a barrel in London.
CURRENCIES: The dollar weakened to 110.62 yen from 110.99 yen on Wednesday. The euro strengthened to $1.1293 from $1.1271.
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