Wall Street lower as retail sales post steep drop in July

Stocks fell in early trading today, as data showed the coronavirus pandemic is still holding back the U.S. economy.

The S&P 500 index fell 0.6% as of 9:15 a.m. Central. The Dow Jones Industrial Average fell 0.6% and the Nasdaq composite fell 1%. The Russell 2000 index of small company stocks was down 1.3%.

Americans cut back on their spending last month as a surge in COVID-19 cases kept people away from stores. Retail sales fell a seasonal adjusted 1.1% in July from the month before, the U.S. Commerce Department said today. It was a much larger drop than the 0.3% decline Wall Street analysts had expected.

According to today’s report, spending fell at stores selling clothing, furniture and sporting goods. At restaurants and bars, spending rose nearly 2%, but the rate of growth has slowed from recent months as the delta variant spread and people worried about dining with others.

Bonds were little changed on the news. The yield on the 10-year Treasury note was 1.25%, down from 1.26% the day before.

Markets also digested news that Chinese factory output, consumer spending and investment grew more slowly in July than expected. The government blamed flooding in central China and controls on travel and business to fight outbreaks of the coronavirus’s delta variant.

Shares of Home Depot fell more than 4% after the company told investors that sales were slowing compared to last year, when millions of locked-down Americans undertook home improvement projects.