NEW YORK – Disappointing news on consumer spending helped pull stocks lower Friday in a quiet end to the market’s worst month in more than a year.
The Standard & Poor’s 500 index closed August with a loss of 3.1 percent while the Dow Jones industrial average lost 4.4 percent. Both had their biggest one-month drop since May 2012.
The month began on a high note. On Aug. 2, news that unemployment fell to its lowest level in more than four years helped lift the S&P 500 index to a record high of 1,709.67. Then things quickly changed.
Bond yields jumped, sending mortgage rates up, as investors began speculating that the Federal Reserve would withdraw some of its support for the economy as early as September.
An array of questions weighed on investors’ minds, said Lawrence Creatura, a money manager at Federated Investors.
The latest wild card is Syria. The possibility that the U.S. could strike Bashar al-Assad’s regime propelled oil prices to a two-year high earlier in the week.
“The Syria situation is a strong dose of uncertainty,” Creatura said. “And investors hate uncertainty.”
Before the market opened Friday, the government reported that Americans’ income and spending both increased just 0.1 percent in July. The scant rise suggested that economic growth was off to a weak start in the second half of the year. It followed other reports showing steep drops in new-home sales and orders for long-lasting manufactured goods in July.
The major indexes headed lower after the market opened Friday and never recovered. The S&P dropped 5.20 points, to 1,632.97.
The Dow Jones industrial average fell 30.64 points, to close at 14,810.31, and the Nasdaq composite dropped 30.43 points, to 3,589.87.
Many investors say the recent slide is hardly a surprise after the stock market had such a strong run. The S&P 500 is still up 14.5 percent this year.