Wall Street Slips From Record High     08/14 15:29

   The U.S. stock market edged back from its all-time high Friday following the 
latest report on the economy to come in surprisingly weak, this time about how 
much shoppers are spending at retailers. 

   NEW YORK (AP) -- The U.S. stock market edged back from its all-time high 
Friday following the latest report on the economy to come in surprisingly weak, 
this time about how much shoppers are spending at retailers. Such data could 
keep interest rates low, which is something Wall Street loves, but it also 
raises the risk of a slowing economy when inflation is still high.

   The S&P 500 slipped 0.2% from its record set the day before. The Dow Jones 
Industrial Average dipped 107 points, or 0.2%, and the Nasdaq composite sank 
0.3%.

   Stocks gave up modest gains from early in the morning after oil prices swung 
higher. The price for a barrel of Brent crude rose 1.7% to $88.52 as 
uncertainty continues about when the war with Iran will allow oil tankers to 
freely exit the Persian Gulf again.

   Also raising uncertainty was a report showing shoppers spent less at U.S. 
retailers last month than the month before. That surprised economists, who were 
forecasting another month of growth.

   On the bright side for financial markets, such a pullback in spending could 
take pressure off inflation. Inflation remains much higher than anyone would 
like, but reports earlier this week suggested the pace of increases in prices 
is decelerating.

   If inflation keeps trending that way, it could encourage the Federal Reserve 
to hold off on hikes to interest rates. Higher rates would help keep a lid on 
inflation, but they do so by intentionally slowing the economy and making it 
more expensive for everyone to borrow money.

   The downside of such data, including last week's surprisingly weak report on 
the U.S. job market, is that they raise the risk of a slowing economy. The Fed 
has no good tool to fix both a stagnating economy and high inflation at the 
same time, which is why what's called "stagflation" is seen as a worst-case 
scenario.

   Some on Wall Street cautioned against overreacting to the weak data on U.S. 
retail sales, even if it was broad based. It could simply be a snap back after 
retail sales in earlier months were boosted by unusual factors such as big tax 
refunds, the World Cup and even an earlier Prime Day event at Amazon, according 
to Jennifer Timmerman, senior investment strategy analyst at Wells Fargo 
Investment Institute.

   U.S. consumers nevertheless appear to be getting more discouraged about the 
economy. A preliminary survey by the University of Michigan suggested sentiment 
among them is weakening by more than economists expected.

   The survey said drops occurred across the political spectrum and showed up 
particularly among older, lower-income and other groups who can be hurt most by 
inflation.

   On Wall Street, Reddit jumped 12.6% after learning its stock will join the 
S&P 500 index on Tuesday. Many professional investors and funds closely track 
the index, either mimicking it or at least measuring their performance against 
it. That can push many to buy a stock automatically when it enters the index.

   Applied Materials fell 5.1% even though the company, whose technology helps 
make semiconductors, reported stronger profit and revenue for the latest 
quarter than analysts expected. CEO Gary Dickerson said global hunger for 
artificial-intelligence technology helped it deliver another record quarter.

   But its stock had already more than doubled this year and built expectations 
very high, which helped pressure the stock on Friday.

   AI stocks in general have been swinging sharply on worries that their prices 
shot too high because of AI euphoria and that their strong growth in revenue 
may not be sustainable.

   All told, the S&P 500 fell 13.23 points to 7,785.76. Despite the loss, it 
nevertheless closed out a third straight winning week, its longest such streak 
since a nine-week run that ended in May.

   The Dow Jones Industrial Average dipped 107.58 to 53,732.41, and the Nasdaq 
composite sank 73.86 to 26,729.16.

   In the bond market, Treasury yields ticked higher and followed the price of 
oil. The yield on the 10-year Treasury rose to 4.69% from 4.63% late Thursday.

   In stock markets abroad, indexes were mixed in Europe and Asia.

   London's FTSE 100 slipped 0.2% after Nigel Farage regained the seat in 
Parliament he quit a month ago, beating trash-can wearing comic candidate Count 
Binface in a special election.

   South Korea's Kospi again had one of the world's sharpest moves and jumped 
2.4% for its third straight gain of at least that much. Seoul has been at the 
center of the world's swings for AI stocks because its market is dominated by 
two tech giants, Samsung Electronics and SK Hynix.