Stocks end the day flat as 5-day rally peters out

Stocks ended more or less where they started Friday as a five-day rally ran out of steam.

The market was down most of the day after disappointing bank earnings weighed on financial company shares. Investors also sold retailers and other consumer-focused stocks. But by the close, the Dow Jones industrial average managed to squeeze out a gain to set another record high.

U.S. government bonds fell, sending their yields higher.

“The market is taking a breather,” said Anna Rathbun, research director at CBIZ Retirement Plan Services. “Investors are taking gains.”

The Dow edged up 10.14 points, or 0.1%, to 18,516.55. The Standard & Poor’s 500 index slipped 2.01 points, or 0.1%, to 2,161.74. Six of the 10 sectors in that index ended lower.

The Nasdaq composite fell 4.47 points, or 0.1%, to end at 5,029.59.

All three indexes ended the week up, their third in a row.

Earnings remained a focus for investors. Wells Fargo shares fell 2.5% to $47.71 after the consumer banking giant reported a drop in second-quarter earnings.

Earnings per share for the entire S&P 500 are expected to have dropped 5.3% last quarter compared with a year earlier, according to S&P Global Market Intelligence. That would be the fourth consecutive quarter of falling profits, rare outside of a recession.

Bill Strazzullo, chief market strategist at Bell Curve Trading, expects stocks will continue to climb in future weeks, but he’s worried. He thinks the gains have more to do with easy money policies by central banks in the U.S., Europe and Japan than any improvement in fundamentals.

“The market isn’t really trading on economic growth and earnings. It’s being propped up by wildly accommodative monetary policy,” he said. “The music will eventually stop and stock markets around the world will fall significantly.”

Trading was subdued in Europe after a man drove a truck into crowds celebrating Bastille Day along the beachfront of Nice, killing at least 84 people.

France’s CAC-40 was down 0.3%, Germany’s DAX was flat and Britain’s FTSE 100 rose 0.2%.

Travel-related stocks fell in the wake of the attack. Cruise operator Royal Caribbean fell 2.1% to $70.39. Delta Air Lines fell 2.4% to $39.98.

Among other stocks making big moves, Herbalife rose 10% to $65.25 after the Los Angeles-based nutritional supplements company agreed to pay a $200-million settlement over allegations that it deceived consumers but avoided a more serious charge that it was operating as a pyramid scheme.

In economic news, the Labor Department reported consumer prices rose a modest 1% in June compared with a year earlier, suggesting that the Federal Reserve may take its time raising interest rates from the record lows that have helped push stocks higher. The Fed’s target for inflation is 2%.

The Commerce Department reported that retail sales rose a robust 2.7% in June from a year earlier. Consumer spending accounts for about two-thirds of economic output in the U.S., much higher than in many other developed countries.

In Asia, Japan’s Nikkei 225 rose 0.7%. The Hang Seng index in Hong Kong climbed 0.5% and South Korea’s Kospi index advanced 0.4%.

Benchmark U.S. crude rose 27 cents to $45.95 a barrel in New York. Brent crude, a standard for international oil prices, climbed 24 cents to $47.61 a barrel.

In other energy trading in New York, wholesale gasoline rose 1 cent to $1.42 a gallon, heating oil fell 1 cent to $1.40 a gallon and natural gas rose 3 cents to $2.76 per 1,000 cubic feet.

Bond prices fell. The yield on the 10-year Treasury note rose to 1.59% from 1.54%, a big move. The euro fell to $1.1064 from $1.1123 and the dollar rose to 105.55 yen from 105.43 yen.

Precious and industrial metals prices declined. Gold fell $4.80 to $1,327.40 an ounce, silver fell 16 cents to $20.17 an ounce and copper fell 1 cent to $2.23 a pound.

UPDATES:

2:25 p.m.: This article has been updated with additional information.

1:10 p.m.: This article has been updated with closing prices.

10:35 a.m.: This article has been updated with more recent market information.

7:55 a.m.: This article has been updated with more recent market information.

This article was originally published at 7 a.m.