By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks ended Tuesday with
broad-based losses after disappointing earnings from TJX Companies,
Inc, Staples, Inc. and weak sales numbers from Caterpillar Inc.
weighed on investor sentiment.
Selling intensified in the afternoon after comments from
Philadelphia Fed President Charles Plosser, who said that Fed may
need to act sooner rather than later should the economy
accelerate.
The S&P 500 (SPX) closed 12.25 points, or 0.7%, lower at
1,872.83. The Dow Jones Industrial Average (DJI) shed 137.55
points, or 0.8%, to 16,374.31. The Nasdaq Composite (RIXF) ended
the day down 28.92 points, or 0.7%, at 4,096.89.
The Russell 2000 index (RUT) closed down 16.53 points, or 1.5%
at 1,097.90.
Recap of MarketWatch's live blog of today's stock-market
action
Kim Caughey Forrest, senior equity analyst at Fort Pitt Capital,
says that today's market sold off on several factors:
"Dismal earnings from retailers signal that consumers do not
want to spend and that is worrying for the economy. Weak sales
numbers from Caterpillar rattled investors after it warned about
falling demand around the world."
Finally, on Plosser's comments: "Even though it's not news and
everyone expects rate hikes sometime in the future, markets did not
like to be reminded of the fact," Forrest said.
Retail sector in focus after Staples, Home Depot results
Retail stocks swooned after a handful of disappointing earnings.
The SPDR S&P 500 Retail ETF (XRT) was down 2.5%.
Shares of Staples Inc. (SPLS) lost 13% after the office-supplies
seller reported adjusted first-quarter profit of 18 cents a share
came in below expectations of 21 cents a share.
The home-improvement chain Home Depot's shares (HD) defied the
trend, rising 1.9%. The company's quarterly results missed
expectations. But the company raised its full-year outlook.
Dick's Sporting Goods Inc. (DKS) shares tumbled 18% as the
company cut its 2014 earnings forecast, citing ongoing weakness in
the golf and hunting segments.
Shares of TJX Cos. (TJX), a clothing and home furnishings
seller, fell 7.6% after the company's revenue growth outlook came
in below Wall Street's expectations.
Urban Outfitters Inc. (URBN) fell 8.8%, stretching losses from
Monday evening after the specialty retailer's quarterly results
missed Wall Street's projections.
General Motors Co. (GM.XX) shares slumped 3.5% after reports
that the automaker is recalling another 2.4 million vehicles for
various problems. The latest move brings GM's recalls for this year
to 29.
Caterpillar Inc. (CAT) shares dropped 3.6%, weighing on the Dow
Jones Industrial Average, after reporting a sharp drop in global
retail machinery sales for the three months through April.
Salesforce.com (CRM) shares rallied 2.7% in after-hours trading
after the business-software maker reported a wider loss in the
first quarter, but adjusted earnings still beat Wall Street
expectations.
The heavy run of appearances this week by Federal Reserve
officials continuedTuesday.
New York Fed President William Dudley, who gets a vote at every
Federal Open Market Committee meeting and is vice chairman of the
interest-rate setting committee, told the New York Association for
Business Economics that there will be "a considerable period of
time" between the end of its asset purchases (in the fall, he says)
and the first rate hike.
Gold pulls back, Japanese stocks rise
Ahead of trading on Wall Street, Japanese stocks snapped a
four-session losing streak. European stocks closed mostly lower,
with Stoxx Europe 600 weighed in part by a decline in Vodafone
shares (VOD) after the telecom company posted a decline in
full-year operating profit.
In the resources sector, gold futures (GCM4) settled modestly
higher for a second straight session on Tuesday, sticking to a
tight trading range and finding little reason to rally after the
World Gold Council reported that first-quarter gold demand was
nearly unchanged from a year ago.
Oil (CLM4) futures settled on a mixed note Tuesday, with traders
awaiting weekly supply data that were expected to show a modest
decline in crude inventories. The ICE dollar index (DXY) rose to
80.036 from 79.935 late Monday.
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