Stock market today: Wall Street drifts after a strong retail sales report

abcnews.go.com:

Wall Street is drifting following the latest signal that the U.S. economy remains solid, though perhaps too strong for the Federal Reserve’s liking

NEW YORK — Wall Street is drifting Tuesday following the latest signal that the U.S. economy remains solid, though perhaps too strong for the Federal Reserve’s liking.

The S&P 500 was 0.2% lower in late trading after flipping between small gains and losses through the day. The Dow Jones Industrial Average was down 39 points, or 0.1%, with less than an hour remaining in trading, and the Nasdaq composite was 0.4% lower.

Financial markets have been shaky in recent weeks due to worries about war in the Middle East and its potential impact on oil prices. But those worries have receded a bit to put the focus back on what usually drives the stock market’s long-term movements: where interest rates, the economy and corporate profits are heading.

A report Tuesday morning showed shoppers spent more at U.S. retailers last month than economists expected. That’s a sign of a healthy economy and likely a result of a still-solid job market, which should help to support profits at companies.

But a too-hot economy could also provide inflation with more fuel and push the Fed to keep interest rates high to suffocate it. Such a move would hurt prices for stocks and other investments at the same time.

The Fed is trying to pull off a delicate balancing act where it slows the economy just enough to drive down high inflation but not so much that it causes a painful recession.

Treasury yields in the bond market rose after the release of the report. The yield on the 10-year Treasury climbed to 4.84% from 4.69% late Monday.

A sharp jump since the summer in the 10-year yield has weighed on the stock