Stocks slip after tepid report on economy

U. S. stocks drifted lower Monday to start what could be a quiet stretch following their best week since March.

The S& P 500 lost 8.58 points, or 0.2%, to 4,273.79. The Dow Jones Industrial Average fell 199.90, or 0.6%, to 33,562.86, while the Nasdaq composite slipped 11.34, or 0.1%, to 13,229.43.

The majority of stocks on Wall Street sank after a report showed growth fell short of economists’ forecasts for businesses in the construction, accommodation and other U. S. services industries last month. It was still a fifth straight month of expansion, though.

It’s the latest mixed reading for a U.S. economy that has defied forecasts for a recession but has begun to slow under the weight of higher interest rates.

“There’s this muddlethrough environment that the market is starting to work through,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial.

Monday’s dip came after a weeks-long rally carried Wall Street to its highest level since August. That was largely because a resilient job market has forced recession- callers to keep pushing out predictions for a downturn by another few months. Still, pressure remains on the economy from the squeeze of still-high inflation, interest rates and cracks in the U. S. banking system.

“The market is starting to build a degree of optimism that I think is warranted,” Saglimbene said. “Whether it comes to fruition remains to be seen.”

After helping to lead the market higher early in the day, a drop for heavyweight Apple helped drag the S&P 500 to its modest loss in the afternoon. It fell 0.8% after unveiling a long-rumored headset that will place its users between the virtual and real world. It will cost $3,500 when it’s released early next year.

In the oil market, crude gained after Saudi Arabia said it would cut back production in hopes of boosting its price. A barrel of U.S. crude rose 0.6% to $72.15, and a barrel of Brent crude, which is the international standard, climbed 0.8% to $76.71.

Both were close to $120 a year ago, and their prices have fallen on worries that a strapped global economy would burn less fuel.

Elsewhere, Wall Street was relatively quiet. This upcoming week is light on earnings reports and toptier economic data. That leaves few clues for the dominant question hanging over the market: Which will come first, the economy falling into a recession or inflation easing enough for the Federal Reserve to cut interest rates?

That’s why much attention is on next week, when the government will release the latest monthly updates on inf lation at the consumer and wholesale levels. It’s also when the Fed will meet next on interest rate policy.