NEW YORK (Reuters) – The S&P 500 and the Dow gained ground in a late rally on Thursday as upbeat retail sales data offset recessionary fears amid the simmering U.S.-China trade tensions.
Wall Street zig-zagged from red to black and back much of the day as investors juggled mixed messages of a strong consumer and dropping U.S. Treasury yields.
The Nasdaq closed lower, weighed by a plunge in the shares of Cisco Systems Inc.
“You’ve an environment where we’re digesting the move down in interest rates and the yield curve yesterday,” said Darrell Cronk, chief investment officer for Wells Fargo Wealth and Investment Management in New York. “Volume is lighter today. You’re not getting outsized movements one way or the other.”
Walmart Inc beat second-quarter analyst estimates and raised its full-year earnings outlook, sending shares of the world’s largest retailer up 6.1% and soothing concerns about waning consumer demand.
Those concerns were further eased when retail sales data surpassed analyst expectations. Consumers, who account for about 70% of the U.S. economy, stepped up their spending across the board in July, according to the Commerce Department.
“One thing the market took solace in today is better U.S. economic data,” Cronk added. “That helped to calm some of the fears from yesterday.”
Other economic data was less sanguine. Manufacturing output shrank more than expected in July, according to the U.S. Federal Reserve, and new claims for unemployment benefits came in above economist forecasts.
Belligerent rhetoric kept U.S.-China trade tensions at a low boil, as China vowed it would counter the last round of tariffs on Chinese imports and called on the United States to meet it halfway, while U.S. President Donald Trump said in an interview any deal must be made “on our terms.”
The prolonged escalation of the trade war between