By Nick Taborek
and Sofia Horta e Costa
NEW YORK: Stocks fell on Friday, giving the Standard & Poor’s 500 index its biggest weekly loss since June, as investors pulled money from exchange-traded funds and weighed growing signs the Federal Reserve will cut stimulus this year.
Gap Inc. dropped 3.1 percent after saying July sales at stores open at least a year rose less than analysts estimated. J.C. Penney Co. fell 5.8 percent as its chairman sparred with the largest shareholder, Bill Ackman’s Pershing Square Capital Management LP, over who should lead the company. Cliffs Natural Resources Inc. of Cleveland jumped 11 percent as metals rallied after Chinese industrial output expanded faster than estimated.
The S&P 500 fell 0.4 percent to 1,691.42. The Dow Jones industrial average dropped 72.81 points, or 0.5 percent, to 15,425.51. The gauge lost 1.5 percent in the past five days, halting a string of six weekly advances.
“It’s been a combination of tapering and just trying to digest the new highs,” said Chris Bouffard, chief investment officer of the Mutual Fund Store in Overland Park, Kan., which oversees $8 billion.
The S&P 500 has rallied 19 percent in 2013 and closed at a record 1,709.67 on Aug. 2. The gauge topped 1,700 for the first time on Aug. 1, and surpassed it twice Thursday before paring gains to close below that level. Friday’s retreat left the index down 1.1 percent in the past five days, the biggest weekly slide since June 21. The Dow’s weekly decline snapped its longest winning streak since August 2012.
Investors pulled almost $1.20 billion from U.S. equity exchange-traded funds over the last four days, according to data compiled by Bloomberg from about 1,500 funds. About $32 billion of deposits went to the funds in July, the most since September 2008, the data show.
Forty stocks in the S&P 500 closed at their highest levels in 52 weeks or longer on Thursday, according to data compiled by Bloomberg, compared with 193 on May 15. Less than 79 percent of the 500 companies traded above their 50-day moving averages, down from 93 percent on May 17.
Speculation the Fed will pare bond purchases in September as the economy strengthens increased this week. Charles Evans, Sandra Pianalto and Richard Fisher, regional Fed presidents in Chicago, Cleveland and Dallas, said this week the central bank may be closer to tapering as the labor market recovers. Fed stimulus has helped propel the S&P 500 up more than 150 percent from its bear-market low in 2009.
Nine out of 10 main industries in the S&P 500 fell. Phone stocks retreated for a fifth straight day, losing 1 percent to extend a weekly loss to 2.5 percent. AT&T Inc. slid 1.4 percent to $34.80.
Gap Inc. dropped 3.1 percent to $44.10. The clothing retailer said July same-store sales rose 1 percent, less than the 1.6 percent estimated by analysts, on declines at its Old Navy and Banana Republic chains.
BlackBerry Ltd. rose 5.7 percent to $9.76, the highest in almost six weeks. Reuters reported the smartphone maker’s board may seek a buyer to take it private, citing unidentified people familiar with the talks.