U.S. stocks fell modestly on Friday, snapping a five-day streak of gains, as declining crude oil prices offset positive economic data and a rosy outlook from shipping company FedEx Corp
Analysts said they were not surprised to see the pullback by stocks after recent encouraging data from around the world and some positive corporate outlooks.
October crude futures sank 3.1 percent to $69.72 per barrel, pressured by investor concerns about demand as refined fuel inventories rise.
Oil prices are sliding until we get some pickup in demand, said John Canally, investment strategist and economist for LPL Financial in Boston. Demand has been weaker than people thought in the U.S. That's holding prices down a little bit.
The Dow Jones industrial average <.DJI> was down 16.78 points, or 0.18 percent, at 9,610.55. The Standard & Poor's 500 Index <.SPX> was down 0.73 point, or 0.07 percent, at 1,043.39. The Nasdaq Composite Index <.IXIC> lost 5.24 points, or 0.25 percent, at 2,078.69.
Losses were limited in the S&P after FedEx raised its first-quarter profit view and said its earnings in the first and second quarters would be above expectations.
The company cited its outlook for fuel prices and continued modest recovery in the global economy for the outlook, which boosted its stock 6.7 percent to $77.49. The outlook also lifted rival UPS
The FedEx news is a very bullish sign. It's another company doing a good job managing its costs, said David Katz, chief investment officer at Matrix Asset Advisors in New York.
Also curbing the market's downside was data from the Reuters/University of Michigan Surveys of Consumers, which showed that consumer sentiment rose more than expected in early September, moving to its strongest level in three months.
Surprisingly strong Chinese industrial output and other economic data also underscored optimism that the global economy is pulling out of a slump.
The vast majority of economic data and corporate data have been positive and moving in a good direction over the past few months, Katz said.
We're seeing initial signs that things are improving. The markets have had a nice boost up over the past few weeks and at some point, it's going to slow. We wouldn't make anything of that.
Markets have risen for the past five days, the longest winning streak since November.
Shares of Morgan Stanley
(Reporting by Ryan Vlastelica; Editing by Kenneth Barry)