Wall Street opens lower on weak economic data

Wall Street opened slightly lower on Friday as tepid economic data weighed, a day after all three major indexes closed at record highs for the first time since 1999.

An unexpectedly flat US retail sales growth and a drop in the producer price index for July hurt investor sentiment.

The weak data could also discourage the Federal Reserve from raising interest rates this year.

Traders are pricing in a 41.6%chance of a rate hike in December, down from 45%on Thursday, according to CME Group's FedWatch tool.

The S&P 500's financial index <.SPSY> fell 0.5% and was the biggest loser among seven of the benchmark's 10 major indexes that were in the red.

 

Shares of Bank of America , JPMorgan , Citigroup fell between 0.8-1.0% and were among the top five stocks that dragged down the S&P.

Goldman Sachs' 0.8% fall weighed the most on the Dow.

At 9:36 a.m. ET (1336 GMT), the Dow Jones Industrial Average <.DJI> was down 33.45 points, or 0.18%, at 18,580.07.

The S&P 500 <.SPX> was down 3.06 points, or 0.14%, at 2,182.73.

The Nasdaq Composite <.IXIC> was down 6.45 points, or 0.12%, at 5,221.95.

Better-than-expected quarterly earnings and robust economic data since late June have pushed the S&P 500 to a series of record highs since July and lifted its valuation above the historical average.

The index is priced at about 17 times forward earnings, compared with a 10-year historical average of 14, according to Thomson Reuters data.

"We're not cheap anymore. People are realizing that inflation is low, interest rates are low and central banks are propping the markets," said John Canally, chief economic strategist at LPL Financial.

"August and September are usually the worst months of the year because there is no trading so any movement is exacerbated."

Nvidia rose 5.6% after the chipmaker reported its fastest quarterly sales growth in nearly five years. The stock was the top percentage gainer among S&P companies.

Acacia Communications soared 25.5% to $85.09 after the company's second-quarter sales doubled and Needham raised price target to $100 from $65.

Advancing issues outnumbered decliners on the NYSE by 1,297 to 1,292. On the Nasdaq, 1,302 issues fell and 887 advanced.

The S&P 500 index showed seven new 52-week highs and no new lows, while the Nasdaq recorded 23 new highs and five new lows.