Wall Street edges lower as economy eyed
(Reuters) – Wall Street retreated from multiyear highs for a second day on Tuesday as investors looked to upcoming economic data this week to help extend a rally that has been largely driven by central bank stimulus.
Stocks have rallied 7 percent since early August, propelling the S&P 500 index to the highest in nearly five years as central banks in Europe and the United States acted to prop up flagging economies. But analysts say that for the rally to continue economic data needs to improve.
“If we don’t start seeing stronger U.S. economic data and Chinese, or we don’t start seeing strong policy measures out of the Chinese, then I think we’re going be due for a correction,” said Jack de Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.
De Gan said if the economic data does not improve, he would look for a correction in the S&P 500 back towards the index’s 50-day moving average, which is about 5 percent below current levels.