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* U.S. 30-year yields hit record low
* U.S. retail sales beat expectations
* U.S.-China trade rhetoric intensifies
* Cisco tumbles following disappointing guidance
* Dow up 0.06%, S&P off 0.02%, Nasdaq down 0.32%
(Updates to late afternoon, changes dateline, byline)
By Stephen Culp
NEW YORK, Aug 15 (Reuters) - Wall Street seesawed from red
to black and back on Thursday as recessionary fears and
simmering U.S.-China trade tensions offset upbeat retail sales
data.
All three major U.S. stock indexes struggled for direction
as investors grappled with mixed messages of a strong consumer
and dropping U.S. Treasury yields.
Walmart (NYSE:WMT) Inc WMT.N beat second-quarter Street estimates and
raised its full-year earnings expectations, sending the world's
largest retailer's stock up 4.3% and allaying 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.
"Consumer strength has a lot to do with the low unemployment
rate and historically low interest rates," said Matthew Keator,
managing partner in the Keator Group, a wealth management firm
in Lenox, Massachusetts. "Money is cheap and people are
working."
But other economic data was less rosy. Manufacturing output
shrank more than expected in July according to the U.S. Federal
Reserve, and initial claims for unemployment insurance came in
above economist forecasts. Bellicose 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 the
world's two largest economies and its economic fallout have
vexed global markets for months and shown few signs of
resolution.
"(China has) a long history of looking at things in terms of
decades, not election cycles," Keator added. "I'm not surprised
that China's playing the long game."
Impending U.S. tariffs weighed on Cisco Systems Inc CSCO.O
which plunged 8.8% after reporting a 25% drop in China sales and
set sales and revenue forecasts well below analyst estimates.
Trade tensions also sent U.S. 30-year Treasury yield to a
record low and the benchmark 10-year yield to a three-year
trough. The Dow Jones Industrial Average .DJI rose 14.83 points,
or 0.06%, to 25,494.25, the S&P 500 .SPX lost 0.67 points, or
0.02%, to 2,839.93 and the Nasdaq Composite .IXIC dropped
24.84 points, or 0.32%, to 7,749.10
Of the 11 major sectors of the S&P 500, six were trading in
the red, with energy .SPSY seeing the biggest percentage drop.
Trade-sensitive industrials .SPLRCI and tech .SPLRCT
were down 0.7% and 0.6%, respectively.
Shares of department store operator JC Penney Co Inc JCP.N
surged 3.5% after the struggling retailer posted a smaller
quarterly loss than analysts estimated. General Electric (NYSE:GE) Co shares dropped 12.8% on the heels of a
report from whistleblower Harry Markopolos accused the
conglomerate of hiding $38.1 billion in potential losses and
claimed its cash situation was far worse than disclosed.
Declining issues outnumbered advancing ones on the NYSE by a
1.08-to-1 ratio; on Nasdaq, a 1.44-to-1 ratio favored decliners.
The S&P 500 posted seven new 52-week highs and 58 new lows;
the Nasdaq Composite recorded 17 new highs and 242 new lows.