The Business Times

US: Wall Street slides as investors fret about retail

Published Thu, May 11, 2017 · 10:02 PM

[SAN FRANCISCO] US stocks fell on Thursday after worse-than-expected sales drops at Macy's and Kohl's sparked a selloff in shares of department stores and stirred fears that consumers are not spending enough to drive strong economic growth.

Macy's dismal quarterly performance sent its shares tumbling 17 per cent, taking a toll on the consumer discretionary sector, which fell 0.59 per cent.

Kohl's dropped 7.86 per cent after it reported a drop in quarterly sales, while shares of Nordstrom and JC.

Penney Co Inc each dropped more than 7 per cent.

"The brick-and-mortar are getting hurt probably more than anybody would have expected," said Anthony Conroy, President of Abel Noser in New York.

The weak corporate reports left investors looking to April retail sales data due out on Friday for signs of whether consumers are simply shifting their spending habits away from department stores, or just aren't spending.

"It's a gut check about the health of the consumer," said Phil Blancato, Chief Executive of Ladenburg Thalmann Asset Management.

"It's a canary in the coalmine moment." Eight of the 11 major S&P sectors declined. Financials fell 0.53 per cent, weighed down by a 1.79-per cent loss in Wells Fargo.

"Any market pullback, if orderly, (is) healthy as long as the underlying fundamentals for the market are strong," said Matthew Peterson, chief wealth strategist at LPL Financial in Charlotte, North Carolina.

The Dow Jones Industrial Average fell 0.11 per cent to end at 20,919.42 points and the S&P 500 lost or 0.22 per cent to 2,394.44.

The Nasdaq Composite dropped 0.22 per cent to 6,115.96.

Shares of Snap Inc plunged 21.45 per cent after the Snapchat owner reported a slowdown in user growth and revenue in its first earnings report as a publicly-listed company.

Straight Path fell 20.41 per cent after it agreed to be taken over by Verizon in a US$3.1 billion deal, snubbing a rival offer from AT&T.

Merck rose 0.77 per cent after the US FDA cleared its lung cancer combination treatment.

Declining issues outnumbered advancing ones on the NYSE by a 1.58-to-1 ratio; on Nasdaq, a 1.73-to-1 ratio favoured decliners.

The S&P 500 posted 16 new 52-week highs and nine new lows; the Nasdaq Composite recorded 92 new highs and 65 new lows.

About 6.7 billion shares changed hands on US exchanges, in line with the daily average over the last 20 sessions.

REUTERS

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