U.S. stocks fell, giving the Standard & Poor’s 500 Index its first weekly drop in more than a month, as investors speculated the Federal Reserve may raise interest rates sooner than estimated after retail sales climbed at the fastest pace in four months.
The S&P 500 fell 0.6 percent to 1,985.56 at 4 p.m. Friday in New York.
“Today’s retail sales and consumer confidence data fall into the argument of those who believe the Fed lift-off date may come sooner,” Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, said. “The worry is if the Fed has to lift rates sooner rather than later, there’s the question of when, but also what the trajectory of interest-rate increases will be and if it will undermine this sanguine picture of equities as the only game in town.”
The 0.6 percent gain in retail sales matched the median forecast of 82 economists surveyed by Bloomberg and followed a 0.3 percent increase the prior month that was stronger than previously reported, Commerce Department figures showed today in Washington. Eleven of 13 major categories showed advances, led by auto dealers and building material stores.
The Thomson Reuters/University of Michigan preliminary consumer sentiment index rose to 84.6 in September from 82.5 the month before. The median estimate in a Bloomberg survey of economists projected an increase to 83.3.
The Fed is assessing the strength of the economy as it winds down a bond-buying program and considers raising rates. The central bank, which meets Sept. 16-17, has said that its benchmark rate will stay low for a “considerable time” after it completes the monthly bond purchases.
The S&P 500 has declined 1.1 percent this week on concern the Fed may raise interest rates sooner than forecast. The index closed at a record on Sept. 5, after rallying for five straight weeks, the longest winning streak this year. The gauge hasn’t posted a four-day string of losses in all of 2014, and the last time it fell more than 10 percent was three years ago.
The benchmark gauge is trading at 16.6 times the projected earnings of its members, near the 16.8 multiple reached on Sept. 5 that was the highest valuation since the end of 2009, according to data compiled by Bloomberg.
All of the 10 main industries in the S&P 500 declined today. Energy shares tumbled 1.5 percent, extending a decline this week to 3.8 percent as crude prices have tumbled on concern that global oil demand is slowing.
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