S&P 500 win streak extended, but Dow drops as rally fizzles

N E W YOR K » Major U.S. stock indexes ended mixed Thursday after an early rally on Wall Street lost its strength toward the end of the day.

The S&P 500 managed to keep a tiny gain that extended its win streak to a third day. The benchmark index, which is within 0.7% of its all-time high set July 26, ended Thursday slightly down for the week.

Gains in health care, technology, utilities and other sectors outweighed losses elsewhere in the market. Advancers outnumbered decliners on the New York Stock Exchange.

The market rallied in the early going as investors weighed a batch of encouraging economic reports. The positive data reinforces the outlook from the Federal Reserve, which projects slower economic growth but not a recession.

On Wednesday, the Fed reduced its benchmark interest rate for the second time this year in a bid to keep the economy from stalling in the face of slowing economic growth overseas and uncertainty over the ongoing U.S.-China trade war.

Fed officials were sharply divided in their outlook for future interest rate policy. As a result, the central bank didn’t indicate clearly whether more rate cuts were likely this year. Still, Fed officials left the door open for additional rate cuts if the economy weakens.

“That’s a nuanced message that markets are beginning to feel comfortable with,” said Kate Warne, the chief investment strategist at Edward Jones.

“And the fact that the economic data today was a little better than expected is reassuring, as opposed to worrisome, in an environment where there’s a lot of variation among voting members (of the Fed).”

The S&P 500 index rose 0.06 points, or less than 0.1%, to 3,006.79. The Dow Jones industrial average gave up an early gain, sliding 52.29 points, or 0.2%, to 27,094.79. The Russell 2000 index of smaller company stocks also relinquished an early gain, losing 6.87 points, or 0.4%, to 1,561.47.

The Nasdaq squeaked out a gain of 5.49 points, or 0.1%, to 8,182.88.

Bond prices changed little. The yield on the 10-year Treasury held at 1.78%.

Traders were encouraged Thursday by new economic snapshots, including data indicating U.S. home sales rose sharply last month and an index of manufacturing activity that came in ahead of analysts’ forecasts. In addition, applications for U.S. unemployment aid edged higher last week but still totaled less than what economists projected.

Recent data suggest the U.S. job market is solid, wages are rising, consumers are still spending and even such sluggish sectors as manufacturing and construction have shown signs of rebounding. Still, investors have been trying to gauge how the economy will fare amid a slowdown in economies overseas and uncertainty over the trade war between the U.S. and China.

The Fed’s outlook for the U.S. economy, and that of corporations, has been clouded this year as the trade conflict between the world’s two biggest economies has escalated and multiple attempts at negotiating a resolution have failed.