Wall Street drifts; S&P 500 on track for 3rd weekly gain

Wall Street is drifting Friday following another set of mixed reports on the economy, as the S&P 500 closes in on its third straight weekly gain.

The benchmark index was virtually unchanged in midday trading, after earlier flipping between small gains and losses. The Dow Jones Industrial Average was down 53 points, or 0.2%, at 26,680, as of 10:54 a.m. Eastern time, and the Nasdaq composite was down 0.1%.

Trading was relatively quiet across markets, with stocks overseas, Treasury yields and gold also making only modest moves. Even Chinese stocks were holding relatively steady: The Shanghai Composite index inched up 0.1% following a run earlier this month where its average daily move was more than 2%.

The U.S. market lost some of its early momentum after a report showed that consumer sentiment was weaker than economists expected.

It’s the latest in a stream of reports that have shown how uncertain the path is for the economy, as a continuing rise in coronavirus counts threatens to undo improvements that seemed to have taken root in the economy.

"The market just continues to try and get its finger on the pulse," said James McCann, senior global economist at Aberdeen Standard Investments.

"The renewed spread of the virus and degree of community infection means the pace of recovery we’ve had is just not going to be able to hold up anymore," he said. "A fairly decent chunk of U.S. activity is at risk."

Amid all the uncertainty, the S&P 500 was nearly evenly split between stocks rising and falling.

BlackRock rose 2.8% for one of the biggest gains in the S&P 500 after the investment firm reported a stronger profit for the spring than analysts expected.

Home builders were also pulling higher after a report showed a bigger jump in home construction during June than economists expected. PulteGroup rose 1%, and Lennar added 1.4%.

On the losing end was Netflix, which fell 7.1% for the largest loss in the S&P 500. Its forecast for new subscribers during the summer fell short of Wall Street’s own expectations, even though it reported stronger earnings for the spring than analysts expected. It’s a relatively rare step down for Netflix, which is still up roughly 50% for 2020 so far.

This week has seen some weakness for big tech-oriented stocks generally, after they had glided through most of the pandemic. Investors have continued to add to bets that Apple, Microsoft and other giants can keep growing almost regardless of the economy. The big run has critics saying they’ve become too expensive, even after accounting for the huge profits that they produce.

Microsoft slipped another 1% Friday, while Apple dipped 0.5%, and tech companies across the S&P 500 were down 0.3%. The declines helped bring the loss for the week for S&P 500 tech stocks to 1.9%, the largest among the 11 sectors that make up the index.

Regions Financial fell 3.5% Friday after reporting a loss for the latest quarter, when analysts were expecting a profit.

The S&P 500 is on track for a 0.9% rise for the week, though that would be the mildest in a three-week winning stretch. It’s rallied back within roughly 5% of its record set in February and is back to roughly where it was in early June.

Pushing stocks up recently have been improvements in hiring, retail sales and other parts of the economy, along with rising hopes for a COVID-19 vaccine. Underlying it all is massive aid for the economy and the promise of ultralow interest rates from the Federal Reserve.

But pulling stocks down at the same time has been the relentless rise of coronavirus counts across much of the country. California has already ordered bars and other businesses to close down again amid a spike in infections, and the worry is that wider shutdowns of the economy may be inevitable.

The yield on the 10-year Treasury held steady at 0.61%. It tends to move with investors’ expectations for the economy and inflation.

In the commodities markets, gold added 0.6% to $1,810.80 per ounce. Benchmark U.S. crude oil slipped 28 cents to $40.65. Brent crude, the international standard, lost 41 cents to $42.96 per barrel.

In Europe, Germany’s DAX returned 0.3%, and France’s CAC 40 slipped 0.5%. The FTSE 100 in London added 0.5%.

In Asia, Japan’s Nikkei 225 slipped 0.3%, South Korea’s Kospi added 0.8% and the Hang Seng in Hong Kong rose 0.5%.