Stocks Pause on Wall Street, Consumer Spending Eases

Nichole Harper
30 May, 2014
New York City

U.S. stocks meandered and consumer spending declined for the first time in a year in April. Consumer sentiment index was revised lower in May. European markets looked ahead to additional monetary stimulus. Resource stocks declined on the second weekly decline in iron prices.

[R]12:40 PM New York – U.S. stocks meandered and consumer spending declined for the first time in a year in April. Consumer sentiment index was revised lower in May. European markets looked ahead to additional monetary stimulus. Resource stocks declined on the second weekly decline in iron prices.[/R]

U.S. stocks struggled and mostly traded below the flat line and consumer spending dipped for the first time in April.

S&P 500 index increased 0.7 to 1,920.69 and the Nasdaq Composite Index decreased 4.5 to 4,243.46.

U.S. consumer spending declined 0.1% in April after rising revised 1% in March, the Commerce Department said today. The decline in spending last month was the first since April last year.

The monthly increase in March was the largest since August 2009.

Even though consumer demand is softening but the prices are creeping up. The price index for consumer spending increased 0.2% in April and matched the increase in March and increased 1.6% from a year ago month.

Consumer sentiment declined 2.2 points to 81.9 in final reading for May, according to the survey conducted by Thomson Reuters and University of Michigan.

The index of sentiment was little changed from the first estimate in May of 81.8.

European Markets

In London trading, FTSE 100 index fell 0.3% or 18.96 to 6,852.33 and in Frankfurt the DAX index edged up 0.02% or 2.03 to 9,940.93.

In Paris, CAC 40 index slipped 0.3% or 14.89 to 4,515.62.

Asian Markets

Stocks in Tokyo edged lower and the latest inflation data confirmed the rising inflationary pressure after the central bank offered an unprecedented stimulus last year.

The internal affairs ministry reported the core consumer price index in April jumped 3.2% from a year ago. The core index excludes volatile fresh food prices.

The index jumped the most since 1991 after the government implemented first increase in sales tax in several years.

The national sales tax was raised from 5% to 8% on April 1. The Bank of Japan estimated the increase boosted inflation by around 1.7%.

The Ministry of Internal Affairs and Communications said Japan''s seasonally adjusted unemployment rate in April was unchanged at 3.6% from the previous month.

The ministry added after seasonal adjustment the number of jobless was also unchanged from March at 2.36 million.

The Nikkei 225 Stock Average slipped 49.34 or 0.3% to 14,632.38 and the broader Topix index edged up 0.73 to 1,201.41. For the week, Nikkei 225 gained 1.2%.

The yen closed at 101.82 against one U.S. dollar.

The Sensex Index slid 16.81 to close at 24,217.34 The CNX Nifty fell 5.70 to 7,229.95. For the week, Sensex dropped 1.9%.

U.S. Stocks in Review

Big Lots, Inc ((BIG)) soared 12.8% or $4.70 to $42.20 after the closeout retailer said net sales in the first-quarter ending on May 3 rose 1.1% to $1.28 billion. Comparable sales in the quarter increased 0.9%.

Net income in the quarter plunged 70% to $3.35 million or 6 cents a diluted share compared to $32.3 million or 56 cents.

Genesco Inc ((GCO)) climbed 5.5% or $3.92 to $74.93 after the footwear, apparel and accessory retailer reported net sales in the first-quarter ending on May 3 soared 6.3% to $628.8 million. Comparable sales in the quarter rose 1%.

Net earnings in the quarter fell 3% to $14 million or 59 cents a diluted share compared to $14.4 million or 61 cents.

Guess, Inc ((GES)) dropped 2.6% or 70 cents to $26.18 after the apparel and accessory retailer stated revenue in the first-quarter ending on May 3 declined 4.8% to $523 million. Comparable sales in the quarter slipped 3.8%.

Net in the quarter swung to a loss of $2.10 million or 3 cents a diluted share compared to a profit of $9.92 million or 12 cents.