Consumers cut spending for first time in a year; Big Lots soars on results
By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) — The U.S. stock market edged lower on Friday, but the main benchmarks were still on track to record weekly and monthly gains. Advances in May sent the S&P 500 to record levels above 1,900, while both the Nasdaq Composite and Dow Jones Industrial Average turned positive for the year.
On Friday, investors appeared subdued after spending data showed consumers reduced purchases and spent less on services in April, while inflation pressures continued to build. Consumer sentiment index also fell in May.
The S&P 500 SPX +0.01% retreated from record levels set on Thursday and was 2 points, or 0.1%, lower at 1,910.70. The benchmark index was still on track for a weekly and monthly gain.
The Dow Jones Industrial Average DJIA -0.12% dropped 45 points, or 0.3%, to 16,654.93. The blue-chip index was set to record a modest weekly and monthly gain.
The Nasdaq Composite COMP -0.08% opened in the green, but soon shed 4 points, or 0.1%, to 4,243.96. The tech-heavy index eyed solid weekly and monthly gains.
In economic news, consumer spending in the U.S. fell in April — the first decline in a year — as Americans cut back on car purchases and spent less on utilities such as natural gas and electricity as the weather warmed up. Meanwhile, inflation pressures continued to build last month. MarketWatchSpending on energy plunged by 3% in April, leading to the first drop in consumer spending in a year. Excluding energy, spending rose 0.1%.Why economists aren’t freaking out about the negative GDP numbers
Separately, a gauge on consumer sentiment fell in May, according to Friday reports from the University of Michigan and Thomson Reuters. Economists polled by MarketWatch had expected a final May level of 82.5, compared with a preliminary reading for the month of 81.8.
Investors will have a first glimpse of the new president of the Cleveland Fed, Loretta Mester, when she speaks at 12:30 p.m. Eastern Time, with many watching for signs of whether she’s a hawk or dove.
Big Lots surges, Express tumbles after quarterly results
Among major movers, Big Lots Inc. BIG +15.09% surged 11% after the retailer raised its outlook for the current fiscal year, while first-quarter revenue beat expectations.
Ann Inc. ANN +4.23% rose 4% after the apparel retailer reported first-quarter adjusted profit that slightly beat Wall Street forecasts.
Express Inc. EXPR -11.78% shares tumbled 13% after the retailer posted a fall in first-quarter profit.
An even bigger loser was Infoblox Inc. BLOX -37.57% . Shares plummeted, dropping 39% after the network-control company said Chief Executive Officer Robert Thomas was stepping down. Revenue for the first quarter fell short of expectations.
Apple Inc. AAPL +0.66% shares were slightly higher Friday after Goldman Sachs raised its price target on the stock to $720 from $635.
Overseas and other financial markets
In overseas markets, European stocks XX:SXXP -0.07% were also largely flat, while in Asia’s performance was largely the same. Gold for August delivery GCQ4 -0.43% and crude for July delivery CLN4 -0.61% were seeing some pressure, while the dollar DXY -0.09% was moving mostly lower.
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Anora Mahmudova is a MarketWatch markets reporter based in New York.
