The Japan Times - Stocks slip in cautious trading after weak US retail sales data

Oil prices turned higher and investors braced for further volatility as US and Iranian officials insisted on control of the Strait of Hormuz, which has been largely shut to tanker traffic by Iran since the US and Israeli launched strikes nearly six months ago.

On Wall Street, where the S&P 500 hit a new record high on Thursday, stocks slipped into negative territory, and most European indexes ended lower after a mixed showing in Asia.

Weaker than expected US retail sales raised new questions about the prospects for the world's biggest economy.

Total US retail sales were down 0.6 percent in July from the previous month, at $763.6 billion, while a new US consumer sentiment survey by the University of Michigan showed confidence dropped by around eight percent in August, ending two months of gains.

"Although the early-month weakening in sentiment was pervasive across various demographic groups, notably large reductions were seen among older consumers, lower-income consumers, and those without a college degree," said consumer survey director Joanne Hsu. "These groups are all particularly vulnerable to any erosion of purchasing power stemming from inflation."

While the data fed into expectations that the Federal Reserve would not hike borrowing costs anytime soon, "investors should be careful what they wish for," said Bret Kenwell, investment analyst at eToro.

"For the economy to stay resilient, consumers will need to do the same," he said, noting that even though US petrol prices eased in July, "that relief did not translate into stronger spending elsewhere."

And with the US-Iran conflict showing little sign of ending, worries about growth and stubborn inflation dominated attention across markets.

"We continue to monitor oil prices and developments in the Middle East as well as Treasury behavior after the weak auction" earlier this week, said Cresset Capital's Jack Ablin, who noted that trading volumes were light on a Friday in the middle of vacation season.

Away from the war, the technology sector and massive spending on artificial intelligence rollouts remained front and center.

US chip manufacturing equipment group Applied Materials saw its shares slide more than five percent despite record quarterly sales of $9.1 billion, with analysts saying investors had expected more.

But SanDisk surged 7.4 percent as markets cheered an investor presentation that outlined the company's prospects with the growth of artificial intelligence.

In Asia, Seoul gained more than two percent Friday as shares in the chipmakers SK hynix and Samsung recovered further following last month's selloff.

The country's Kospi index had tanked about 40 percent between hitting its June high and an intra-day trough on August 6, but has since rebounded more than 20 percent.

Friday also saw gains for Tokyo, where tech giants Kioxia, Advantest and Sony rallied along with the technology investment titan SoftBank.

- Key figures around 2020 GMT -

New York - DOW: DOWN 0.2 percent at 53,732.41 (close)

New York - S&P 500: DOWN 0.2 percent at 7,785.76 (close)

New York: Nasdaq: DOWN 0.3 percent at 26,729.16 (close)

London - FTSE 100: DOWN 0.2 percent at 10,750.11 (close)

Paris - CAC 40: DOWN 0.2 percent at 8,636.80 (close)

Frankfurt - DAX: UP 0.5 percent at 26,440.31 (close)

Tokyo - Nikkei 225: UP 0.6 percent at 68,713.80 (close)

Hong Kong - Hang Seng Index: DOWN 1.1 percent at 25,116.85 (close)

Shanghai - Composite: FLAT at 3,927.18 (close)

Brent North Sea Crude: UP 1.7 percent at $88.52 per barrel

West Texas Intermediate: UP 1.4 percent at $82.40 per barrel

Euro/dollar: UP at $1.1567 from $1.1528 on Thursday

Pound/dollar: UP at $1.3535 from $1.3487

Dollar/yen: DOWN at 159.38 yen from 159.50 yen

Euro/pound: DOWN at 85.46 pence from 85.48 pence

burs-jmb/acb

H.Takahashi--JT