By Stephen Culp
NEW YORK (Reuters) -Wall Street was mixed on Monday as investors took a post-Thanksgiving pause ahead of crucial economic data as the holiday shopping season kicked in to high gear with retailers trying to lure bargain hunters with Cyber Monday deals.
The tech-heavy Nasdaq was slightly higher, the Dow was edging red and the S&P 500 was essentially unchanged, but leaning lower.
Online shopping deals as part of Cyber Monday are expected to entice shoppers to spend a record $12 billion, according to Adobe Analytics, in the latest upbeat sign regarding the health of the American consumer, whose spending is responsible for about 70% of the U.S. GDP.
The S&P 500 Retail index was up 0.9%.
“Coming off four weeks of very strong and positive market activity we’re seeing investors take a bit of a breather and focus on data,” said Greg Bassuk, chief executive officer at AXS Investments in New York. “This week all eyes will be focused on additional inflation data as well as consumer confidence and spending to determine if Main Street has kept up with Wall Street.”
Resilience of the consumer and the tightness of the labor market amid signs of a dampening economy have many market-observers digesting the possibility that while the Federal Reserve has reached the end of its tightening cycle, it might keep restrictive policy rates in place for longer than expected.
Financial markets have cemented a 99.4% likelihood that the central bank will leave its Fed funds target rate unchanged at next month’s meeting, with the possibility of a rate cut starting gaining ground in mid-2024, according to CME’s FedWatch tool.
On the economic front, a larger than expected drop in new home sales added to the subdued sentiment. Later in the week, market participants look to the Commerce Department’s second take on third-quarter GDP expected on Wednesday, to be followed on Friday with its broad-ranging Personal Consumption Expenditures (PCE) report.
Remarks from Federal Reserve policymakers later in the week will also be parsed for clues regarding the duration of the central bank’s restrictive policy.
“Investors are looking for confirmation that not only have rates peaked, but more importantly how quickly the Fed might start lowering rates in 2024,” Bassuk added.
At 2:11 p.m. EST, the Dow Jones Industrial Average fell 46.79 points, or 0.13%, to 35,343.36, the S&P 500 lost 2.83 points, or 0.06%, to 4,556.51 and the Nasdaq Composite added 24.35 points, or 0.17%, to 14,275.21.
Among the 11 major sectors in the S&P 500, real estate and consumer discretionary were enjoying the largest percentage gains, while energy shares were down the most.
Amid the Cyber Monday fervor, Amazon.com gained 1.3% and Walmart edged up 0.6%.
Affirm Holdings surged 11.0%, as the payment platform’s “buy now, pay later” option was seen hitting an all-time high, boosting the online holiday sales.
Online gift platforms Etsy and Shopify were up 3.3% and 5.5%, respectively.
Elsewhere, Crown Castle International advanced 4.8% as activist investor Elliott Investment Management sought executive and board changes at the wireless tower owner.
GE HealthCare sagged by 3.4% following UBS’s downgrade of the medical devices company’s stock to “sell” from “neutral.”
Declining issues outnumbered advancing ones on the NYSE by a 1.18-to-1 ratio; on Nasdaq, a 1.35-to-1 ratio favored decliners.
The S&P 500 posted 34 new 52-week highs and no new lows; the Nasdaq Composite recorded 78 new highs and 64 new lows.
(Reporting by Stephen Culp in New YorkAdditional reporting by Shristi Achar A and Amruta Khandekar in BengaluruEditing by Shinjini Ganguli and Matthew Lewis)
