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A late slide erases gains for US indexes

Wall Street closed out a choppy week of trading with more of the same Friday, as a late-afternoon stumble led U.S. stock indexes to a mixed finish.

The S&P 500 ended the day just a fraction of a point higher after a burst of selling erased a 0.9% gain. Despite a three-day stretch of losses, the benchmark index still managed to finish higher for the week, its third straight weekly gain.

Big Tech and energy companies fell while health care and industrial stocks rose. The Dow Jones Industrial Average also eked out a gain, while the Nasdaq composite posted its fourth straight loss. Treasury yields were flat.

The market had been up for much of the day after the government reported that retail sales rose in September for the fifth straight month. That report appeared to overshadow new data showed U.S. industrial production had its weakest showing last month since the spring.

The market’s late-day fade capped a week of volatility for stocks as companies began reporting their third-quarter results and traders’ hopes for a new round of economic stimulus from Washington dimmed.

“The market is sort of bouncing around here,” said Tom Martin, senior portfolio manager with Globalt Investments. “We’ve had a lot of noise lately and that’s probably what we’re going to have over the next couple of weeks.”

The S&P 500 rose 0.47 points to 3,483.81. The Dow gained 112.11 points, or 0.4%, to 28,606.31. At one point, it had been up by 348 points. The Nasdaq fell 42.32 points, or 0.4%, to 11,671.56. The Russell 2000 index of small-cap stocks dropped 5.08 points, or 0.3%, to 1,633.81.

Despite the market’s downbeat finish, the major stock indexes have already recouped most of their losses from September’s market swoon.

Stocks have been mostly climbing this month, but trading became choppy this week as ongoing talks between Democrats and Republicans on an economic stimulus package failed to deliver results. Investors have been hoping that Washington would provide more financial support for the economy since July, when a $600-a-week extra benefit for the unemployed expired.

Traders have been watching economic data closely to see whether the loss of that beefed-up unemployment aid would lead to an overall pullback in spending. On Thursday, the government’s said the number of Americans seeking unemployment aid increased last week to 898,000, a historically high level that underscores how the economy continues to be hobbled by the pandemic and recession that erupted seven months ago.

Friday’s retail sales report provides some encouragement, suggesting Americans’ appetite for spending remained solid last month. The Commerce Department said retail sales rose 1.9% in September, the fifth straight monthly increase.

“There’s a need for stimulus, even though this data is heartening in a way,” said Ross Mayfield, an investment strategist at Baird.

Still, given that the Nov. 3 election is fast approaching, the market is not expecting leadership in Washington to deliver an economic stimulus package before voters go to the polls, Mayfield said.

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