Consumer companies fell after mixed economic data. The sector could receive a lift from one retail powerhouse's surprisingly strong second-quarter earnings report.
"Amazon with some nice earnings after the bell," said JJ Kinahan, chief executive of IG North America. "The consumer stays strong."
The Institute for Supply Management's services-activity index on Thursday showed a July figure of 52.7, the seventh successive positive reading of activity, albeit at a slower rate of expansion.
"Excess savings and additional pent-up demand for services will likely support consumer spending in the near term," said Jeffrey Roach, chief economic strategist at brokerage LPL Financial. "But, investors should expect the spending splurge to fizzle in the coming months as the economy cools," Roach said.
Weekly jobless claims were more or less flat, suggesting that the labor market is still expanding.
"The equity market seems to have taken a 'bad news is good news' view -- equities have tended to rally on weak growth data and sell off on strong data -- because weak-but-positive growth data reduce the risk of additional rate hikes," said strategists at brokerage Goldman Sachs Group.
"Looking ahead, we expect these 'perverse' equity reactions to continue as long as recession fears are on the table," the Goldman strategists said.
In a bad sign for discretionary spending, boat dealership chain OneWater Marine tumbled in the wake of a tepid fiscal third-quarter earnings report.
Anheuser-Busch InBev shares ticked up as the impact of a Bud Light boycott on the brewer's earnings was not as severe as feared.
Spirit Airlines shares slid after a slowdown in domestic travel activity weighed on the budget airline's earnings.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
08-03-23 1720ET
