- POSTED: 21 May 2014 04:55
Wall Street stocks on Tuesday slumped on a batch of mostly-disappointing retail earnings and after a US Federal Reserve official endorsed a speedier rise in benchmark interest rates than some expect.
NEW YORK: Wall Street stocks on Tuesday slumped on a batch of mostly-disappointing retail earnings and after a US Federal Reserve official endorsed a speedier rise in benchmark interest rates than some expect.
The Dow Jones Industrial Average dropped 137.55 (0.83 per cent) to 16,374.55.
The broad-based S&P 500 fell 12.25 (0.65 per cent) to 1,872.83, while the tech-rich Nasdaq Composite Index lost 28.92 (0.70 per cent) at 4,096.89.
The losses followed a barrage of earnings reports from retailers, most of which disappointed. Among the companies to fall especially far were Dick's Sporting Goods (-18.0 per cent) and Urban Outfitters (-8.8 per cent).
Art Hogan, chief market strategist at Wunderlich Securities, also cited remarks from Charles Plosser, president of the Federal Reserve Bank of Philadelphia, who said business conditions could require the central bank to raise rates "sooner rather than later."
Hogan said Plosser is regarded as a hawkish Fed member, but that his remarks pushed stocks lower on a "catalyst-light" day.
Dow member Home Depot said cold weather crimped sales in the first quarter even as it bumped up its full-year earnings forecast. Shares of the Dow component rose 1.9 per cent.
Staples plunged 12.6 per cent after reporting first-quarter earnings of 18 cents per share, three cents shy of analyst expectations. Part of the weakness was due to North American store closures over the last 12 months, which helped push sales 2.8 per cent lower from last year's level.
TJX Companies, which owns the retail chains TJ Maxx, Marshalls, and others, fell 7.6 per cent as first-quarter earnings and revenues missed expectations on a bigger-than-expected hit from unfavorable foreign exchange rates and disappointing sales.
General Motors announced it was recalling 2.4 million more vehicles in the US as the giant automaker continues to address safety issues amid the faulty ignition recall scandal.
The latest recall will double to $400 million the extra accounting charges the company records for recall costs. GM shares sank 3.5 per cent.
Dow component Caterpillar reported that April machine sales tumbled 13 per cent. Bank of America Merrill Lynch rated the statistic as "disappointing but not entirely surprising" given weakness in the mining sector. Shares lost 3.6 per cent.
Bond prices were mixed. The yield on the 10-year US Treasury fell to 2.51 per cent from 2.54 per cent Monday, while the 30-year held steady at 3.38 per cent. Bond prices and yields move inversely.