Stocks lose steam
NEW YORK - US shoppers are starting to spend, but business owners aren't so sure their customers will keep coming back.
These conflicting signals confused investors, who first bought stocks and then sold them as the day progressed yesterday. It didn't help that there were fewer stock traders in the market as is common during the summer months, which led to lower than usual trading volume.
The Dow Jones industrial average closed up 2.71 points at 13,172.14. It was up as much as 53 points at midday. The broader Standard & Poor's 500 index lost 0.18 point to 1,403.93 and the Nasdaq composite index fell 5.54 points to 3,016.98.
Earlier, investors were energised by a surprise gain in retail sales in July. That report provided evidence that American shoppers are still spending even as their counterparts in Europe and Asia slow down.
However, another report showed that US companies weren't restocking their shelves or their warehouses fast enough, a signal that they believed shoppers weren't going to continue spending.
US retail sales rose in July by the largest amount in five months as Americans spent more on cars, furniture and clothes. The 0.8 per cent gain was better than analysts were expecting and showed that US consumers spend at stores after cutting back in the April to June period.
JJ Kinahan, a strategist at online broker TD Ameritrade, said the increase wasn't enough to justify a significant upward move in the stock market.
"Consumers are still cautious," Kinahan said. "Even numbers that are marginally better look good when compared to a trough."