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Overnight Markets: Wall Street declines on retail earnings

by Himanshu Singh on May 21, 2014 at 03:48

Overnight Markets: Wall Street declines on retail earnings

US stocks closed lower on Tuesday, halting a two-day gain, after several major retailers from Staples Inc. to Urban Outfitters Inc. posted worse-than-estimated results and smaller companies slid.

The Dow Jones industrial average fell 137 points, or 0.8%, to close at 16,374. The Standard & Poor's 500 index lost 12 points, or 0.7%, to 1,872. The Nasdaq composite fell 28 points, or 0.7%, to 4,096.

Staples fell 13% after the office supply chain said its earnings fell sharply in the latest quarter. Dick's Sporting Goods plunged 18% after its earnings and revenue fell short of what investors were expecting.

Urban Outfitters sank 8.8% as earnings missed forecasts. Caterpillar Inc. led industrial shares lower after reporting a steepening decline in retail machine sales.

On the positive side, Home Depot Inc. rose 1.9% for the biggest gain in the Dow. While the company posted first-quarter profit that trailed some analysts’ estimates, chief financial Officer Carol Tome said it expects revenue lost due to the grim winter will be recouped this quarter.

Caterpillar lost 3.6% after global sales fell 13% in the three months through April compared with the same period a year earlier. Inc. rose 1.5%, while Netflix Inc. advanced 2% for the largest gain in the S&P 500.

Carnival Corp. (CCL) climbed 0.9% after saying P&O Cruises Australia, one of its 10 brands, will add two ships to its fleet next year.

Ophthotech Corp. jumped 24% after the drug developer granted Novartis AG the exclusive rights to commercialise its Fovista treatment in markets outside the US.

In Asia, shares declined for a fourth day on Wednesday after the yen strengthened ahead of a Bank of Japan decision on monetary policy today.

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