Closing Bell: Stocks End Volatile Session Lower on Weak Retail Earnings

new york stock exchange traders investing market news economy earnings
Richard Drew/AP
Retail stocks helped push U.S. stock markets lower again Friday, a day after the biggest one-day drop in nearly two months, as evidence mounted showing consumers are becoming more cautious. Blue chip stocks had their worst week of the year.

The Dow Jones industrial average (^DJI) lost 30 points, or 0.2 percent to 15,081, the Standard & Poor's 500 index (^GPSC) surrendered 5 points, or 0.3 percent, to 1,655, and the Nasdaq composite index (^IXIC) edged down 3 points to 3,602.

Nordstrom (JWN) became the latest department store chain to post lower-than-expected second-quarter revenue as its same-store sales slipped, prompting it to lower its full-year sales and profit forecast. Shares fell 5 percent to $56.35.

Other retailers have disappointed investors with second-quarter earnings. From Walmart (WMT) and Gap (GPS) to Macy's (M) and McDonald's (MCD), chains that cater to middle- and lower-income Americans are feeling the pinch of an uneven economic recovery.

The retail industry is a closely watched part of the U.S. economy as consumer spending makes up roughly 70 percent of economic activity. The disappointing outlooks are worrisome because they take into account the back-to-school shopping season, typically the second-biggest shopping period for U.S. retailers.

Adding to the market's concern, a preliminary reading on consumer sentiment for August slipped from July's six-year high, according to a University of Michigan survey.

One bright spot was homebuilding stocks, which rallied after the Commerce Department reported housing starts rose 5.9 percent in July, compared with a 9.9 percent drop in June. Pulte Group and Lennar were among the top percentage gainers in the S&P 500. PulteGroup (PHM) rose 2.4 percent to $16.29 and Lennar (LEN) gained 1.9 to $33.91. But rival D.R. Horton (DHI) fell 0.7 percent.

Airline stocks gained some ground, with U.S. Airways (LCC) shares rising 1.8 percent to $16.01 but the sector is still lower for the week following a lawsuit from the Department of Justice to block the merger of US Airways and American Airlines.

PC-maker Dell (DELL) reported a 72 percent drop in its fiscal second-quarter earnings. That may help convince Dell shareholders to approve the $24.8 billion buyout proposed by founder Michael Dell and private-equity firm Silver Lake Partners. Dell shares rose 11 cents to $13.82 -- still below the proposed buyout price of $13.88 a share.

More Stocks in the News:
  • The Securities and Exchange Commission approved the proposed $8 billion sale of the venerable New York Stock Exchange to the much younger futures exchange, IntercontinentalExchange, or ICE. Shares of NYSE Euronext (NYX) -- parent of the NYSE -- rose 0.6 percent to $42.12, while ICE (ICE) rose 0.8 percent to end Friday trading at $181.83.
  • Green Mountain Coffee Roasters (GMCR) shares rose 3.4 percent to $76.41 after Nasdaq OMX Group (NDAQ) said the company will replace Life Technologies (LIFE) in the Nasdaq 100 index on Aug. 22.
  • Pandora Media (P) shares jumped 2.4 percent to $20.33 following a bullish call on the stock from Goldman Sachs (GS).
  • J.C. Penney (JCP) shares fell 3 percent to $13.41 as the retailer entered into an agreement with former board member and largest shareholder Bill Ackman, paving the way for him to sell his stake.
  • Shares of Applied Materials (AMAT) rose 1.9 percent to $15.62, even though the chip-making equipment company's earnings and outlook fell short of Wall Street estimates as analysts focused on its long-term outlook.
What to Watch Monday:
  • Urban Outfitters (URBN) reports corporate quarterly earnings.
-Compiled from staff and wire reports.

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Out source your a..

August 19 2013 at 2:37 AM Report abuse rate up rate down Reply

All you need to do is sell them 1,000 rolls of toilet paper at a time!

August 19 2013 at 2:26 AM Report abuse rate up rate down Reply

Stocks went lower? How about stocks went into the crapper!!

August 18 2013 at 9:04 PM Report abuse rate up rate down Reply

all of obamas policies are going to crash our economy and cause a notional disaster

August 18 2013 at 10:59 AM Report abuse +1 rate up rate down Reply
1 reply to MERLIN's comment
Stepney AOL

Correct me if I'm wrong but didn't we have a national disaster/economic before he got in???
maybe you should say another disaster.

August 18 2013 at 11:44 AM Report abuse -2 rate up rate down Reply

As I posted last week several times, you might want to dump those Crude/gasoline futures, the game is coming to a fast end. Reports will be out on how the speculation/pricing of contracts have been screwing EVERYONE since 1999. Don't say I did not tell you so.

August 18 2013 at 7:39 AM Report abuse rate up rate down Reply

America was built by people who understood you have to actually produce goods and services, create jobs for us that generated a usuable tax base. Not the 1% who scam profits off of the basic Commodites we need like, energy, food, insurance, clothes. We have eyes wide open now and grow tired of un-limited price jumps without wages matching. Wall Streets hey days at the expense of MY WALLET are coming to a end. It will not be the ending the rich expect.

August 18 2013 at 7:33 AM Report abuse +2 rate up rate down Reply

I have been watching FOX news with my mom (I almost never watch) . Those people are REALLY smart. No wonder Evan is obsessed with FOX.

August 17 2013 at 9:34 PM Report abuse rate up rate down Reply

Bottom line? If people have no money to spend, then retailers will not be able to sell their junk -- real economic recovery needs REAL jobs, with REAL salaries, or we'll never get this thing moving again.

August 17 2013 at 9:03 PM Report abuse +4 rate up rate down Reply


August 17 2013 at 2:22 PM Report abuse -1 rate up rate down Reply
Stepney AOL

How about lowering your earning expectations...Oh yeah then the investors will pull out....
It's all hog-wash

August 17 2013 at 12:05 PM Report abuse +2 rate up rate down Reply