By Abigail Summerville
(Reuters) – Wall Street stocks closed mixed on Monday as investors braced for a slew of U.S. economic data this week, especially consumer prices, to gauge the outlook for Federal Reserve monetary policy.
The fall. The benchmark index and the most technologically-weighted index closed higher.
The index, focused on small businesses, fell 0.9%.
“The jump into a rotation into small-caps like the Russell 2000 and cyclicals in general and financials was a very popular trade a few weeks ago and it's really reversed,” said James Abate, chief investment officer at Centre Asset Management in New York.
“If you look at the trends in earnings and growth, we do not have an expanding economy that would support even broader growth and stock price appreciation.”
Investors are awaiting Wednesday's U.S. consumer price index reading and retail earnings to gauge shopper demand.
CPI data is expected to show headline inflation accelerated 0.2% in July from June, but remained unchanged at 3% year-on-year.
Money markets are uniformly betting on a 25- or 50-basis-point cut in U.S. interest rates in September, expecting a full easing of 100 basis points by the end of 2024, CME's FedWatch tool showed.
U.S. retail sales figures for July, due on Thursday, are likely to show marginal growth, with investors hoping any weakness in the data could reignite fears of a consumer slowdown and a possible recession.
Walmart (NYSE:) and House deposit (NYSE:) will report results later this week.
“Retail earnings are another indicator of consumer health, particularly in light of the rising unemployment rate in the most recent report,” Abate said.
“One thing that could be a big disappointment for the market is if the CPI comes in higher than consensus.”
The S&P 500 gained 0.23 points to close at 5,344.39, while the Nasdaq Composite rose 35.31 points, or 0.21%, to 16,780.61. The Dow Jones Industrial Average fell 140.53 points, or 0.36%, to 39,357.01.
Starbucks (NASDAQ:) rose 2.58% following reports that activist investor Starboard Value, which has a stake in the coffee giant, wants the company to take steps to improve its stock price.
KeyCorp (NYSE:) rose 9.1% after Canadian bank Scotiabank bought a minority stake in the U.S. regional lender in an all-stock deal worth $2.8 billion. Hawaiian Electric fell 14.45% after the utility raised questions about its “continuity.”
On the New York Stock Exchange, falling stocks outnumbered advancing stocks by a ratio of 1.46 to 1. On the Nasdaq, falling stocks outnumbered advancing stocks by a ratio of 1.54 to 1.
The S&P 500 posted 10 new 52-week highs and seven new lows, while the Nasdaq Composite posted 51 new highs and 179 new lows.
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