STOCKS fell slightly less flat last week as investors recoiled from signs of transformation in the US economy.
Unless retailers like Target can assuage concerns about consumer habits when they report earnings this week, the dour mood may persist. The promises of the Internet made by speculators in the 1990s are now being fulfilled, to the horror of investors in the retail sector.
The department store has been a cornerstone of American capitalism since at least 1878, when the first Macy's opened in New York City. The place TheNew York Times called the "Sixth Avenue bazaar" survived the Great Depression, the rise of the suburban shopping mall and the might of Walmart.
Now, Macy's and the chains that followed its lead, such as Nordstrom and JCPenney, have been brought to their knees by a company that only sold books a few years ago - Amazon.com. Even Walmart Stores, which blended the department-store with that of the supermarket and the bargain basement, is scrambling to keep up with consumers' preference for shopping online. Last week, Walmart said it's working on a subscription service akin to Amazon Prime.
Until recently, people thought that generic items like electronics, books and CDs would sell online but those that had to be fitted to an individual like clothes and accessories could not. The rise of rapid delivery and tweaks to return policies by Amazon and other online stores put paid to that idea. Like Walmart, the department stores have tried to fight Amazon on its own turf, introducing offers like "in-store pickup" for online sales, but, unlike Walmart, they are struggling to compete with online stores' pricing. There's simply less overhead when you don't have to keep the lights on at your virtual bazaar.
Last week, Macy's reported its most marked sales decline in any quarter since the pits of the recession. Nordstrom, the Seattle department store that was thought to have figured out the tastes of the millennial consumer, cut its growth projection for the year. Another store, Kohl's, registered a similarly dour quarter.
Early in the week, people feared these reports, in conjunction with recent increases in layoffs, reflected an economic slowdown. "There's still a lot of skepticism surrounding employment trends and worries about health of consumer though," said Eric Marshall, portfolio manager for mutual fund firm Hodges Capital.
But Thursday's April retail sales report from the Commerce Department showed one of the largest monthly increases of the last five years. Americans are still shopping. They are just not doing it at the mall.
Nor is the mall the only institution of capitalism under assault from the Internet. The Silicon Valley buzzword of the last few years has been "disruption"; it doesn't take much tongue- twisting to tie the concept to destruction. Consciously or otherwise, the Internet companies in the Bay area are laying waste to the industries that they were supposed to revolutionise.
It's just like the dotcom speculators said it would be: everything has shifted to the World Wide Web - shopping, culture and finance. Instead of channel surfing, people watch television shows on their own schedule by using streaming services like Netflix and, of course, Amazon. If the cable companies were not also selling Internet service, they could be in serious trouble. Broadcast companies are sorely missing the advertisers who are migrating to YouTube and Facebook Live. Even live sports, thought to be the last redoubt of television, are showing up on tablets and smart-phones. The Internet, in a roundabout way, is also threatening the car industry as the online global positioning services developed by Google become a key component in the new generation of automated cars. In banking, fintech - the intersection of finance and technology - is the only niche that gets investors excited.
In the second wave of the Internet, there have been many losers - countless Main Street shops and malls, countless TV stations and print publications. But there are only a handful of - admittedly very large - winners. On Wall Street, the biggest winners, which are also among the best-performing stocks of the last five years, are known as FANG - Facebook, Amazon, Netflix and Google.
Outside Silicon Valley, there is hope that the commodities bust seems to be over. Smaller oil companies and miners are still laying off workers and shutting down operations. But BHP Billiton, which has huge operations in both metals and energy, said last week that it would forge ahead with multi-billion-dollar expansion plans. To some, that sounded like an endorsement of the recent rebound in energy prices. Industrial production data due this week could reveal whether oil companies are ordering heavy equipment again.
This week, discounters Walmart and Target are expected to report more success in competing with Amazon than their full-priced rivals. Investors are also watching developments in the United Kingdom nervously. With the vote looming next month, polls on the "Brexit" remain tight. Officials from the International Monetary Fund and the Bank of England are issuing stern warnings about the potentially devastating effects of the UK leaving the European Union.
The US stock market is also stuck in a technical mire. Quincy Krosby, market strategist at Prudential Financials, said major indices keep trying - and failing - to break through their record highs from last summer.
"There's always the sense if it doesn't cross over into the next level, then that's the market's way of saying, we're contracting," said Ms Krosby.
"There are those who think it's indicative of a bear market."