US open: Stocks little changed despite batch of much weaker-than-expected economic data

dl new york city nyc ny us usa united states of america manhattan skyline city finance trading nyse dow jones sp nasdaq dollar dollars usd fed federal reserve — ManhattanSharecast photo / Josh White

Wall Street's main market gauges were mostly in the black on Tuesday afternoon despite the release of a batch of significantly weaker-than-expected economic releases.

The data arrived just two days before the start of the potentially key Jackson Hole central banking symposium which it was hoped would shed more light on the path that interest rates would most likely follow in 2023.

At 1609 BST, the Dow Jones Industrial Average was off by 0.33% or 112.0 points to 32,951.61, while the S&P 500 was up 0.03% to 4,139.0 and the Nasdaq Composite ahead by 0.24% to 12,409.38.

"While fear of economic collapse has been centred upon Europe, this afternoon has seen the US economy in the limelight as services activity crashed to the lowest level since May 2020," said IG senior market analyst Josh Mahony.

"Easing inflation data and improved retail sales numbers had provided a false sense of security for some but today's PMI and new home sales data has served to highlight the struggles ahead for US businesses."

S&P Global's preliminary business activity index for the US services sector slumped unexpectedly (again) to a reading of 44.1 for August.

That was down from a reading of 47.3 in June and much weaker than economists' forecasts for a rebound to 50.2.

A similar downside surprise one month before had contributed to much talk around imminent recession risks before being contradicted by the results of other more closely-followed surveys.

New home sales data for July meanwhile delivered another large negative surprise on Tuesday, revealing a drop in sales to below their level from before the pandemic.

According to Commerce, the annualised pace of new home sales fell at a month-on-month pace of 12.6% in July to reach 511,000 (consensus: 580,000).

Investors were also digesting a decline in the Federal Reserve Bank of Richmond's regional manufacturing sector survey from 0 in July to -8 for August.

Dow Jones - Risers

Chevron Corp. (CVX) $161.84 3.15%
Caterpillar Inc. (CAT) $197.26 2.87%
Dow Chemical Co. (DOW) $55.40 1.82%
Nike Inc. (NKE) $111.86 1.38%
Boeing Co. (BA) $160.46 0.93%
Intel Corp. (INTC) $34.15 0.92%
American Express Co. (AXP) $158.40 0.44%
Cisco Systems Inc. (CSCO) $47.74 0.07%
International Business Machines Corporation (CDI) (IBM) $135.62 0.05%
Walgreens Boots Alliance, Inc. (WBA) $37.31 0.01%