(For a live blog on the U.S. stock market, click LIVE/ or
type LIVE/ in a news window)
* Stock market to be shut for Labor day on Monday
* Ulta Beauty tumbles on full-year forecast cut
* U.S. consumer spending increases strongly, sentiment drops
* Indexes down: Dow 0.05%, S&P 0.12%, Nasdaq 0.41%
(Updates to late afternoon, adds commentary, New York dateline,
changes byline)
By Sinéad Carew
NEW YORK Aug 30 (Reuters) - U.S. stocks were were in the red
on Friday afternoon as investors were wary after mixed data and
ahead of a holiday weekend in which a fresh round of U.S.
tariffs on Chinese imports were due to kick in.
While Wall Street was on course to register a weekly gain,
August was expected to show its biggest monthly decline since
May after escalations in U.S.-China trade tensions and the
inversion of a key part of the U.S. yield curve which is often a
recessionary signal.
Wall Street markets will be closed on Monday for the U.S.
Labor Day holiday. Since bonds have recently outperformed
stocks, investors may have taken early action to rebalance their
portfolios for the end of the month due to the long weekend,
according to Vinay Pande, head of trading strategies at UBS
Global Wealth Management in New York.
"Trying to make a very large move in the last day of the
month when Labor day is following is not the best idea," said
Pande. "Most of the rebalancing that was expected ... has likely
been accomplished in the days leading up to the long weekend."
U.S. consumer spending increased solidly in July as
households bought a range of goods and services. While this
could allay financial market fears of a recession, a survey from
the University of Michigan, also out Friday, showed its consumer
sentiment index in August dropping by the most since December
2012, amid nerves over the U.S.-China trade war. "The news today has been mixed. There was positive news
about consumption data and negative news on consumer
confidence," said Pande.
At 2:57 p.m. ET, the Dow Jones Industrial Average .DJI
fell 13.47 points, or 0.05%, to 26,348.78, the S&P 500 .SPX
lost 3.53 points, or 0.12%, to 2,921.05 and the Nasdaq Composite
.IXIC dropped 32.82 points, or 0.41%, to 7,940.58.
The United States and China had given hopeful signs on trade
on Thursday as they discussed the next round of in-person
negotiations in September ahead of a looming deadline for
additional U.S. tariffs. But Randy Frederick, vice president of trading and
derivatives for Charles Schwab (NYSE:SCHW) in Austin, urged caution.
"Frankly, markets have been overly optimistic about trade,"
he said. "I would caution people to be a little careful because
optimism won't last if it doesn't ultimately materialize into
something substantive like an agreement, which I just have a
hard time seeing it happen."
A new round of U.S. tariffs on some Chinese goods were
expected to come into effect on Sunday and the technology sector
.SPLRCT was the biggest weight on the S&P with a 0.4% loss.
Ulta Beauty Inc ULTA.O , which had been the S&P's top
performing stock in Wall St's decade-old bull market, tumbled
29% after the cosmetics company cut its full-year profit
forecast.
The biggest percentage gainer on the benchmark index was
Campbell Soup Co CPB.N , which jumped 5% after its quarterly
profit beat estimates. Advancing issues outnumbered declining ones on the NYSE by a
1.16-to-1 ratio; on Nasdaq, a 1.16-to-1 ratio favored decliners.
The S&P 500 posted 36 new 52-week highs and no new lows; the
Nasdaq Composite recorded 35 new highs and 53 new lows.