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Wall Street slips as retail sales data revives inflation fears


By Medha Singh

(Reuters) - Wall Street slipped on Tuesday after data pointed to a steady rise in inflation, reviving fears of faster interest rate hikes, while a lack of progress in U.S.-trade talks continued to weigh on the market.

After the data, which supports economists' expectations that the Federal Reserve will raise interest rates next month, the yield on the benchmark U.S. 10-year Treasury note surged to a seven-year high of 3.0740 percent.

U.S. rose moderately in April as rising gasoline prices cut into discretionary spending, but the gain in core retails sales was stronger, indicating consumer spending was on track to accelerate after slowing sharply in the first quarter.

"You had good number this morning which was further confirmation that first-quarter economic facts were overstated and that economic momentum in the second quarter remains strong," said Brent Schutte, at in Milwaukee,

"The reason why equity market is falling today is because we are once again pondering if the strength of the U.S. economy is enough to make the Fed raise faster in the future."

The and are still "very far apart" on resolving trade frictions, U.S. to said, as a second round of high-level talks were set to begin in

But said the is seeking to make a trade deal.

At 13:10 p.m. EDT the was down 211.67 points, or 0.85 percent, at 24,687.74, the 500 was down 21.83 points, or 0.80 percent, at 2,708.30 and the was down 71.30 points, or 0.96 percent, at 7,340.02.

The losses were broad based, with ten of the 11 sectors in the red. Only the financial sector was higher, by a marginal 0.02 percent, helped by higher yields.

The KBW was up a stronger 0.55 percent.

While consumer stocks overall were lower, shares of retailers including J. C. Penney, and rose between 1.6 percent to 3.9 percent.

slipped 1.4 percent after the No.1 U.S. missed Wall Street forecasts for sales at established stores.

Smaller rival was down 0.7 percent.

Declining issues outnumbered advancers for a 2.10-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.15-to-1 ratio on the Nasdaq.

The S&P index recorded seven new 52-week highs and seven new lows, while the Nasdaq recorded 67 new highs and 39 new lows.

(Reporting by in Bengaluru; Editing by and Arun Koyyur)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, May 15 2018. 23:04 IST