Wal-Mart News Weighs on Stocks
Major indexes headed lower Thursday after the retailing giant cut its fourth quarter forecast. Other retailers also reported weak results
U.S. stocks were lower at the opening of day Thursday afternoon after a volatile morning. Sentiment was hurt by news that Wal-Mart (WMT) forecast lower income due to disappointing December sales, and weak reports from other greater retailers.
President-elect Barack Obama urged quick action on his economic stimulus contrivance.
Also, while commencing jobless claims fell 24,000 to 467,000 ultimate week, continuing claims surged above 4.6 million. The news comes in opposition of Friday’s report on December nonfarm payrolls, which are expected to fall 490,000. Also on Thursday, a report on November consumer credit was expected to show small quantity change from October posterior falling $3.4 billion the month before.
Long-term Treasuries were slightly higher Thursday. The dollar index was lower. Gold futures were up in volatile trading. Oil futures were mixed.
On Thursday at 12:10 p.m. ET, the 30-stock Dow Jones industrial medium was grow less by 98.12 points at 8,671.58. The broader S&P 500 index shed 3.30 points to 900.83. The tech-heavy Nasdaq composite index fell 3.30 points to 1,595.76.
On the New York Stock Exchange, 16 stocks were lower in price toward every 13 that advanced. Nasdaq breadth was 13-12 positive. Trading was slow.
Retailing cyclops Wal-Mart cut its fourth quarter earnings by means of share from continuing operations estimate from $1.03-$1.07 to 91 cents-94 cents. The firm situated 1.2% higher December U.S. same-store sales (1.7% without material for burning) and slightly lower complete company sales. Wal-Mart noted that mass sales in its international portion improved on a constant-currency basis. The company sees flat-to-2% higher January same-store sales.
Other retailers, including JC Penney (JCP), Gap Inc. (GPS), Nordstrom (JWN), Costco Wholesale (COST), Bed Bath & Beyond (BBBY), Target (TGT), Saks (SKS), American Eagle Outfitters (AEO), Abercrombie & Fitch (ANF), and Macy’s (M), also reported weak December results or guided earnings let down. Macy’s also said it power of choosing close 11 underperforming stores.
Bucking the downtrend: Sears Holdings (SHLD), what one. was sharply higher Thursday after posting 1.1% lower Kmart December same-store sales, 13% lower Sears domestic same-stores sales, and 7.3% lower December total same-store sales. The partnership noted that gross margin rates for the quarter-to-date period improved scornfully from last year for example higher margin rates at Kmart were a little offset by dint of. lower margin rates at Sears domestic stores. The company generally expects fourth-quarter EPS of $2.44-$3.09 (excluding items); it also expects to end fiscal 2009 with approximately $8.5 billion of domestic schedule, down from $9.1 billion last year.
President-elect Obama outlined his plans for the economic recovery from Virginia.
Original text: http://www.businessweek.com/investor/content/jan2009/pi2009018_673248.htm?campaign_id=rss_null
