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

 

Broadband Network: Spark Launches New, Competitive Ultra Fibre Plan Line-Up

Spark is giving customers an even more compelling reason to switch to its Ultra Fibre plans from today with the introduction of new competitive pricing for the majority of its plans (details below) and Fibre Landline (voice-over-fibre technology) for ... More>>

Employment: ANZ Proposes Casualisation In Whangarei Stores

ANZ workers in Whangarei could see their incomes drop by 20 to 40 percent if the bank’s proposal to reduce the number of full-time positions goes ahead says FIRST Union national organiser Tali Williams. More>>

Finance: BNZ Develops Specialist Tāmaki Māori Banking Team

BNZ develops specialist Tāmaki Māori Banking Team to support Māori as Auckland grows More>>

Pharmaceuticals: Commerce Commission To Consider Pharmaceuticals Merger

The Commerce Commission has received an application from Pfizer Inc. seeking clearance to acquire all of the shares in Hospira Inc. More>>

Real Estate: Housing Unaffordability Issues Spread

Surging house prices in Auckland and Queenstown last month pushed home ownership even further beyond the reach of first home buyers in the two districts, according to the AMP360 Home Loan Affordability Report for March. More>>

Statistics NZ: Annual Exports To China Dip Below Australia

The value of goods exports to Australia ($8.7 billion) surpassed those to China for the year ended March 2015, Statistics New Zealand said today. More>>

Science: Hookworm Discovery At Malaghan Institute

Professor Graham Le Gros has led a team which has stimulated both innate and memory responses to the parasite, discovering along the way the unexpected behaviour of one particular immune cell, in Hookworm, one of the world’s most devastating tropical ... More>>

Business: Provinces Urged To Make Full Use Of New Air Services

Provincial New Zealand has been urged to use new air services to Auckland or risk losing them either partially or completely. The stark warning was issued today by Far North mayor John Carter at a ceremony at Kaitaia airport to mark the final Air ... More>>

Mobile: 2degrees To Credit All Calls And SMS To Nepal

In the wake of the devastating earthquake in Nepal in the weekend, 2degrees will be crediting all calls and SMS messages made to mobiles and landlines in Nepal from Friday 24th April until midnight Wednesday 29th April. More>>

Scoop Business: Alex Swney Pleads Guilty To $2.5M Fraud Charge

Alex Swney, former chief executive of the Auckland city centre business association Heart of the City, has pleaded guilty to dishonestly using documents to obtain $2.5 million. More>>

ALSO:

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news