Stocks slip but are still on track for 6th monthly gain
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Stocks fell in morning trading on Wall Street Friday with internet retail giant Amazon weighing down major indexes following a weak sales report and forecast.
The S&P 500 index fell 0.4% as of 10:20 a.m. Eastern and is on pace for a weekly loss, though still poised to finish out July with its sixth monthly gain. The Dow Jones Industrial Average fell 61 points, or 0.2%, to 35,025 and the Nasdaq fell 0.6%.
Amazon, which fell 7%, weighed down much of the benchmark S&P 500 and tech-heavy Nasdaq. The company reported disappointing sales during its second quarter and gave investors a weak sales forecast. The company did extremely well during the worst of the virus pandemic as people were forced to hunker down and shop from home, but the recovery has more people returning to in-store shopping and other pre-pandemic activities.
Digital pinboard and shopping tool company Pinterest ran into a similar issue during the second quarter. Its stock slumped 17% after reporting disappointing user growth.
Investors are also reviewing the latest economic data as they try to gauge the economic recovery’s trajectory. Consumer spending, which makes up a majority of the economy, rose 1% in June. A key measure of inflation rose 3.5%, marking the fastest such 12-month surge since 1991.
Inflation fears have been lingering over the market through the year. Investors are trying to figure out whether rising inflation will be a temporary effect of the economic recovery or longer lasting. They are also closely watching for the Federal Reserve’s reaction to both the economic recovery and rising inflation. The central bank is expected to eventually temper its support, through bond purchases and other measures, but the timing is still unknown.
The yield on the 10-year Treasury fell to 1.24% from 1.27% late Thursday.