Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 6, 2016. REUTERS/Brendan McDermid TPX IMAGES OF THE DAY
NEW YORK: US stocks fell on Wednesday as oil prices surrendered early gains and weak results from Walt Disney and Macy’s weighed on consumer discretionary stocks.
Disney shares were down 5.5% at US$100.71 after the company’s results missed expectations as advertising and subscriptions declined at ESPN.
The stock was the biggest drag on the Dow, accounting for about 35 points of the index’s 80-point fall.
Macy’s sank 7.8% to US$34.14 after the department store operator slashed its full-year sales forecasts. Macy’s weak report dragged down other department store chains with J.C. Penney, Kohl’s, Nordstrom and Dillard’s falling between 2% and 6%.
All the 10 major S&P sectors were lower, with the consumer discretionary index’s 1.38% fall leading the decliners.
“ ... We see a little bit of profit taking from yesterday’s rally while Disney’s earnings miss is certainly a factor,” said Peter Cardillo, chief market economist at First Standard Financial in New York.
At 9:44am ET (1344 GMT) the Dow Jones industrial average was down 86.05 points, or 0.48%, at 17,842.3, the S&P 500 was down 7.25 points, or 0.35%, at 2,077.14 and the Nasdaq Composite was down 14.98 points, or 0.31%, at 4,794.90.
Oil prices were slightly lower, surrendering early gains as worries about supply disruptions resurfaced after Shell announced the closure of a key Nigerian pipeline.
On Tuesday, the S&P 500 and Dow Jones notched their biggest daily percentage gain since March 11 and the Nasdaq its biggest since April 13, helped by a jump in oil and a rally in Amazon .
Tuesday’s gains appeared to breathe new life into a two-month rally that had petered out in mid-April and left the S&P 500 with an increase of just about 2% for 2016.
Still, traders are struggling to find new catalysts to propel the market back towards record highs due to underwhelming first-quarter earnings and mixed economic data that provided little clarity on the path of Federal Reserve’s rate-hike path.
First-quarter earnings for S&P 500 companies have mostly beaten analysts’ expectations, but are still estimated to have fallen 5.4% from a year ago, according to Thomson Reuters data.
“I think we’re going to continue to mull around till we get signs of solid economic activity,” said Cardillo.
Fossil slumped 30.9% to US$27.83 and were set to open at a six-and-a-half year low after the watch retailer cut its 2016 forecast.
Office Depot fell 36.1% to US$3.89 after terminating its planned merger with Staples. Staples was down 17.1% at US$8.58.
Declining issues outnumbered advancing ones on the NYSE by 1,538 to 1,110. On the Nasdaq, 1,431 issues fell and 825 advanced.
The S&P 500 index showed 29 new 52-week highs and five new lows, while the Nasdaq recorded 24 new highs and 13 new lows. - Reuters
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