Stocks stuck
The Russell 2000 (NYSE: IWM) is just below Thursday’s level along with the Dow Jones Industrial Average (INDU) as investors digest news of unexpectedly strong U.S. economic growth in the second quarter and a rise in July consumer sentiment.
At 10:48 a.m. ET the Russell 2000 was down 1.06 points, or 0.13%, to 790.42. The Dow had retreated 20.48 points, or 0.15%, to 13,453.09.
American consumers feel like spending money and U.S. economic growth has picked up, but that’s apparently not enough to overcome the jitters from Thursday’s massive sell-off.
The University of Michigan’s monthly index of consumer sentiment increased to 90.4 in July, below the forecast 91.5 but June’s reading of 85.3.
That’s good news, because consumer spending was the one weak spot in the U.S. economy’s strong second-quarter performance.
Buoyed by rising exports, U.S. gross domestic product expanded at an annualized rate of 3.4% between April and June, above the projected rate of 3.2%, according to the Commerce Department.
Core consumer prices increased at an annual pace of 1.4%, within the U.S. Federal Reserve’s preferred range of between 1% and 2%.
But consumer spending, which accounts for over 70% of the U.S. economy, grew at an unimpressive annualized pace of 1.3% in the second quarter, below the rate of 3.7% during the first three months of the year.
