Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


While you were sleeping: US retailers disappoint

While you were sleeping: US retailers disappoint

May 21 (BusinessDesk) – Wall Street fell as US retailers including Staples reported earnings that underpinned concern about the pace of growth in corporate profits.

With about an hour of trading left in the day in New York, the Dow Jones Industrial Average shed 0.67 percent, the Standard & Poor’s 500 Index fell 0.58 percent, while the Nasdaq Composite Index dropped 0.60 percent.

Slides in shares of Caterpillar, down 2.5 percent, and AT&T, down 1.9 percent, led the Dow lower. Bucking the trend were shares of Home Depot, up 2.5 percent for the largest percentage gain in the Dow, after the company said May sales were “robust”.

Not all were encouraged by Home Depot’s sales amid concern, shared by US Federal Reserve Chairman Janet Yellen, about the strength of the recovery of the American housing market.

"We remain neutral as we worry that a weaker housing market will impact sales as the year progresses," Janney Capital Markets analyst David Strasser wrote in a note, Reuters reported.

Federal Reserve Bank of New York President William Dudley said that the industry is facing “several significant headwinds.”

“On the housing side, residential investment has stalled out over the past few quarters. Although I expected some slowing due to the rise in mortgage rates in the middle of 2013, the extent of the slowdown has surprised me given that the recent pace of housing starts—roughly 1 million per year—is far below what is consistent with the economy’s underlying demographic trends,” Dudley said in remarks for the New York Association for Business Economics.

“I think housing has been weaker than anticipated because several significant headwinds persist for this sector,” Dudley said.

Meanwhile, several US retailers disappointed on the earnings front.

Shares of Staples sank, last down 13 percent, after the company forecast quarterly earnings that fell short of expectations and posted a drop in its latest quarter profit.

“We’re making progress meeting the changing needs of our customers as we reinvent Staples,” Ron Sargent, Staples’ chairman and chief executive officer, said in a statement. “Despite a slow start to the first quarter, our results were in line with our expectations and we expect to build momentum throughout 2014.”

Shares of retailers Dick’s Sporting Goods, TJX Companies and Urban Outfitters also sank, down 17.2 percent, 6.8 percent and 7.7 percent respectively, after reporting earnings that failed to meet the mark.

“What we’re seeing is a re-assessment of the growth prospects of earnings,” Brad McMillan, the chief investment officer for Commonwealth Financial Network, told Bloomberg News. “It’s not a question of ‘are we going to grow?’ Because we are. It’s ‘are we going to grow as fast as we thought we would?’”

Indeed, Dudley on Tuesday said that the pace of interest rate rises will be “relatively slow,” adding that “this depends, however, in large part, not only on the economy’s performance, but also on how financial conditions respond to tightening.”

In Europe, the Stoxx 600 Index ended the day edging lower to a close of 338.32. Germany’s DAX fell 0.2 percent, France’s CAC 40 slid 0.4 percent, while the UK’s FTSE 100 dropped 0.6 percent. Shares of Vodafone sank 5.5 percent after the company predicted a decline in profit this year.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Final Frontier: Rocket Lab And NASA Sign Commercial Space Launch Agreement

Rocket Lab has signed a Commercial Space Launch Act Agreement with the National Aeronautics and Space Administration (NASA). The agreement enables Rocket Lab to use NASA resources - including personnel, facilities and equipment - for launch and reentry efforts. More>>

ALSO:

Scoop Business: Wheeler Downplays Scope For ‘Large’ Rates Fall

Reserve Bank governor Graeme Wheeler says some market commentators are predicting further declines in interest rates that would only make sense for an economy in recession, although some easing is likely to be needed to maintain New Zealand’s economic growth. More>>

ALSO:

Ruataniwha Dam: Consent Conditions Could Mean Reduced Intensity

Legal advice sought by the Hawke’s Bay Regional Council on the Ruataniwha Dam consent conditions has confirmed that farmers who sign up to take water from the dam could be required to reduce the intensity of their farming operation to meet the catchment’s strict nitrogen limit. More>>

Health And Safety: Bill Now Sees Rules Relaxed For Small Businesses

Health and safety law reform sparked by the Pike River coalmine disaster has been reported back from the industrial relations select committee with weakened requirements on small businesses to appoint health and safety representatives and committees. More>>

ALSO:

Bearing Fruit: Annual Fruit Exports Hit $2 Billion For First Time

The value of fruit exported rose 20 percent (up $330 million) for the June 2015 year when compared with the year ended June 2014. Both higher prices and a greater quantity of exports (up 9.0 percent) contributed to the overall rise. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news