U.S. stocks dropped from near-record levels and the dollar gained as traders digested mixed data in the world's largest economy amid bets interest rates will stay low.
The S&P 500 Index retreated after rising to within three points of an all-time high, the dollar halted a two-day slide and Treasuries were little changed. The loonie erased gains after the Bank of Canada cited increased risks of slower growth, while Mexico's peso slumped as the nation's finance minister is stepping down. Crude climbed as investors parsed comments from OPEC and Russia for signs of whether oil producers will agree on measures to bolster the market.
Investors are awaiting the Federal Reserve's Beige Book for indications of the health of the U.S. economy, after disappointing readings on services-sector activity, manufacturing and hiring cast doubt on the strength of the recovery. The U.S. Citigroup Economic Surprise Index, which measures data surprises relative to market expectations, fell below zero for the first time since July in an indication that releases have been worse than expected. Traders pared their bets on a rate increase in September to 22%, according to fed fund futures data compiled by Bloomberg.
(More: Advisers are bracing for a September market storm)
“The economic data that's come out in the past week or so has been underwhelming,” said Walter Todd, who oversees about $1.1 billion as chief investment officer for Greenwood Capital Associates LLC in South Carolina. “There was a little hype about the Fed moving in September, but now we're back to where we were a month ago, questioning whether they're going to raise at all this year.”
STOCKS
The S&P 500 lost 0.2% to 2,181.44 at 12:38 p.m. in New York. American stocks have been treading water since their Aug. 15 record amid speculation on the path of interest rates and lackluster economic reports. The benchmark gauge has held in a band of 1.5% for 38 days, the narrowest ever for that length of time, and has gone 41 sessions without a 1% move in either direction, the longest since 2014.
“Interest rates are off the table, but the picture is somewhat cloudy,” said Patrick Spencer, London-based vice chairman of equities at Robert W. Baird, which manages $151 billion. “People are very cautious because they've seen the recent economic indicators and they're concerned that 2017 will continue to see slower growth, but the data haven't been too bad.”
Consumer-staples companies were on the way to their worst drop in six weeks as Whole Foods Market Inc. and Kroger Co. fell more than 4%, tracking a 14% drop in rival Sprouts Farmers Market Inc. after the company cut its profit outlook. Apple Inc. slipped before it's expected to unveil a new watch and iPhone, while Facebook Inc. climbed to a fresh high, extending its longest winning streak in five months.
