Stocks End Day Mixed After Disappointing Retail Earnings
November 19 2019 - 4:39PM
Dow Jones News
By Anna Isaac and Paul Vigna
The S&P 500 gave up early modest gains Tuesday, as weakness
in shares of Home Depot and other retailers weighed on major
benchmarks.
The broad stock-market index declined less than 0.1%, though the
technology-heavy Nasdaq Composite gained 0.2%. The Dow Jones
Industrial Average fell 102 points, or 0.4%, to 27934, weighed down
by component Home Depot, which slumped 5.4% after trimming its
expectations for sales growth. All three indexes had closed at
records Monday.
A drop here isn't really a surprise, said Nick Reece, senior
analyst at Merk Investments. "We've seen sentiment get pretty
optimistic," he said. "It's probably a little overstretched."
Shares of retailers were among the biggest decliners in
Tuesday's session as the group began reporting third-quarter
results. Shares of Kohl's dropped 19%--on track for their worst
one-day drop since January 2017 -- after the department-store
operator lowered its profit guidance for the year.
The disappointing outlook from both companies weighed on the
stocks of other U.S. retailers, as investors grew concerned about
the health of a sector that has been strong so far this year.
Macy's, which is scheduled to report earnings later in the week,
fell 11%, while Nordstrom declined 6.2%. Gap slumped 3.7%.
Meanwhile, discount retailer TJX rose 1.9% after its report
showed a strong rise in sales.
Traders also had an eye on Washington, but not necessarily for
the main event.
Even though the top focus in the capital was the continuing
impeachment hearings, traders said they were also concerned about a
bill in the Senate in support of Hong Kong protesters, and how it
might affect the continuing negotiations over a U.S.-China trade
deal. The bill, if passed, would allow for sanctions against anyone
found violating Hong Kong's autonomy.
A vote on the bill, which has been put on an expedited schedule,
could happen as soon as Tuesday.
"Some feel traders are concerned that a Senate vote on Hong Kong
could blow up chance of trade deal," said Art Cashin, who runs
UBS's floor operations at the NYSE.
Globally, stocks edged higher as investors grew less
apprehensive about the economic outlook. Hong Kong's Hang Seng
Index ended the day up almost 1.6%, while the Shanghai Composite
gauge advanced 0.9%.
Meanwhile, the pan-continental Stoxx Europe 600 index fell
0.1%.
"Markets were thinking a recession was imminent at the end of
August, now people are discovering that it is less bad than that,"
said Florian Ielpo, head of macroeconomic research at
asset-management firm Unigestion. "Pessimism is starting to
fade."
The ICE dollar index, which tracks the greenback against a
basket of currencies, dropped sharply immediately after President
Trump said he met with Federal Reserve Chairman Jerome Powell at
the White House Monday and "protested" about U.S. interest rates
being too high. The gauge pared back most of those losses in the
hours since.
Mr. Trump, who has been vocal in his criticism of the central
bank, tweeted that he discussed the state of the economy, trade
issues, and the impact of a "too strong" dollar with the central
bank chief. The Fed said Mr. Powell reiterated that he hoped
interest-rate cuts earlier this year would bolster the economy.
The yield on the U.S. 10-year Treasurys slipped to 1.785%, from
1.808% on Monday. In commodities, U.S. crude futures fell 3.2% on
concerns about excess oil supplies.
Write to Anna Isaac at anna.isaac@wsj.com and Paul Vigna at
paul.vigna@wsj.com
(END) Dow Jones Newswires
November 19, 2019 16:24 ET (21:24 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.