Retailers and S&P 500 Decline After Wal-Mart Plunges 10%

Nichole Harper
14 Oct, 2015
New York City

Market indexes on Wall Street declined after Wal-Mart and JPMorgan disappointed investors. Wal-Mart dropped 10% after lowering annual earnings outlook. JPMorgan declined nearly 3% after the bank missed third-quarter earnings.

[R][6:20 PM New York City, New York – Market indexes on Wall Street declined after Wal-Mart and JPMorgan disappointed investors. Wal-Mart dropped 10% after lowering annual earnings outlook. JPMorgan declined nearly 3% after the bank missed third-quarter earnings.[/R]

U.S. stocks traded lower on Wednesday after Wal-Mart and JPMorgan disappointed investors.

Retail stocks were under pressure after Wal-Mart forecasted fiscal 2017 earnings per share to decline as much as 12% and retail sales in September barely rose.

Wal-Mart plunged 10%, the largest single-day decline in years and in the heaviest trading since January. The decline also erased $22 billion of market cap of the company.

U.S. retail sales in September adjusted for seasonality and calendar increased 0.1% to $447.7 billion from August and jumped 2.4% from a year ago month.

Total retail sales in three months to September soared 2.3% from a year ago period, the Department of Commerce reported today.

Separately, the department said inventories at the end of August were unchanged from July to $1,811 billion but jumped 2.4% from a year ago month.

Sales in August decreased 0.6% to $1,320.5 billion from July and declined 3.1% from a year ago month.

The seasonally adjusted Producer Price Index in September declined 0.5% after remaining unchanged in August and 0.2% increase in July.

On an unadjusted basis, the index for final demand in September declined 1.1% from a year ago month, the Department of Labor said.

On Wall Street, Tollbooth Strategy Index slipped 61.59 or 0.6% to 10,480.24.

S&P 500 index edged down 1.12 to 2,002.61 and the Nasdaq Composite Index rose 12.18 or 0.3% to 4,808.80.

Crude oil in New York fell 37 cents to $46.29 a barrel and gold jumped $9.85 to $1,178.69 an ounce.

U.S. Movers

Bank of America Corp ((BAC)) gained 1% or 16 cents to $15.68 after the financial services provider reported total revenues in the third-quarter ending in September dropped 2.3% from a year ago to $20.91 billion.

Net in the quarter swung to profit $4.1 billion or 37 cents per diluted share compared to a loss of $232 million or 4 cents from the same quarter last year.

BlackRock, Inc ((BLK)) jumped 2.2% or $7.19 to $322.31 after the investment management company said revenues in the third-quarter ending in September rose 2% from a year ago to $2.91 billion.

Net income in the quarter declined 8% to $843 million or $5 per diluted share compared to $917 million or $5.37 from the same quarter last year.

Long-term total net inflows in the quarter increased to approx $49 billion and Cash management asset under management jumped 5% in the third quarter to $285.7 billion.

JPMorgan Chase & Co ((JPM)) slumped 2.7% or $1.64 to $59.91 after the investment banking services provider said total revenues in the third-quarter ending in September plunged 7% from a year ago to $22.78 billion.

Net income in the quarter soared 22% to $6.80 billion or $1.68 per diluted share compared to $5.57 billion or $1.35 from the same quarter last year.

Wells Fargo & Co ((WFC)) slid 36 cents to $51.50 after the bank and financial services provider reported total revenues in the third-quarter ending in September jumped 3% from a year ago to $21.88 billion.

Net income in the quarter rose 0.5% to $5.44 billion or $1.05 per diluted share compared to $5.41 billion or $1.02 from the same quarter last year.

The bank said total average loans in the quarter soared 7% to $895.1 billion and total average deposits increased 6% to $1.20 trillion.

Separately, yesterday the company agreed to acquire GE’s commercial lending and leasing business worth about $30 billion.

European Markets

U.K. unemployment rate for the three months to August fell to 5.4% from 5.6% in three months to May period and from 6% in a year ago period.

There were 1.77 million unemployed people, 79,000 fewer from three months to May and 198,000 less from a year ago period, Office of the National Statistics said.

Industrial output in August fell 0.5% in the euro area and 0.3% in the wider region of EU28 from June. In July production rose 0.8% in euro area and 0.4% in the wider region of EU28.

Compared to year ago production in August jumped 0.9% in the euro area and 1.9% in the wider region of EU28, the Statistical Office of the European Communities reported.

In London trading, FTSE 100 index dropped 64.48 or 1% to 6,278.20 and in Frankfurt the DAX index fell 91.10 or 0.9% to 9,939.13.

In Paris, CAC 40 index decreased 25.81 or 0.6% to 4,617.57.

ASML Holding NV declined 4.5% to €74.48 after the Netherlands-based chip-equipment maker reported total revenues in the third-quarter ending on September jumped 17.4% from a year ago to €1.55 billion.

Net profit in the quarter surged 32.1% from a year ago to €322 million compared to €244 million and diluted earnings per share increased to €0.75 from €0.56.

The company forecasted net sales for the fourth-quarter of about €1.4 billion and gross margin of about 45%.

Deutsche Wohnen AG jumped 2.4% to €24.77 after the Germany-based residential property developer rejected formal acquisition offer from the domestic rival Vonovia SE and reiterated its commitment to merge with LEG Immobilien AG.

Deutsche Wohnen is in negotiation to acquire the regional rival LEG Immobilien AG for €4.6 billion and is awaiting the shareholder approval.

Vonovia will submit a formal offer to buy Deutsche Wohnen for about €14 billion, if the merger between Deutsche Wohnen and LEG fails to win a shareholder approval.

Vonovia SE slumped 4.3% to €27.72.

Diageo Plc slipped 1.6% to 1,815 pence after the U.K.-based alcoholic beverage maker agreed to sell its U.S. and U.K.-based wine operations to Australia-based Treasury Wine Estates Ltd for about $552 million in cash.

Asian Markets

Nikkei in Tokyo dropped 1.9% and fell below 18,000 mark for the first time in two weeks. China-related stocks declined for the second day after the second largest economy reported mixed trade data.

Stocks in Tokyo dropped following the weak market closures in New York and in Europe after China reported mixed trade data.

China-related stocks lost ground led by industrial equipment makers including Fanuc Corp, Nippon Steel, Hitachi Corp and Murata Manufacturing.

On the economic front, M2 money stock in September jumped 3.8% to 910.5 trillion yen but decline from 4.2% in a previous month, the Bank of Japan said.

M3 money stock increased 3.1% to 1,227.2 trillion yen but slumped from 3.4% in August.

The Nikkei 225 Stock Average declined 343.74 or 1.9% to 17,891 and the broader Topix index slumped 32.30 or 2.2% to 1,470.83.

The yen strengthened to 119.50 against a dollar.

Sensex index in Mumbai trading declined for the third day in a row after the latest read on wholesale price showed a decline for the eleventh month in a row.

The wholesale price index in September slipped 4.54% compared to the fall of 4.95% in August, the Ministry of Commerce & Industry reported.

Rupee strengthened 15 paisa to 65.03 against one U.S. dollar.

The Sensex Index fell 66.87 or 0.3% to close at 26,779.66. The CNX Nifty decreased 23.80 or 0.3% to 8,107.90.

Reserve Bank of India is expected to keep its accommodative stance in place as consumer prices in September increased at a faster pace of 3.7%, but below the central bank’s target of 6%.

Hindustan Unilever Limited dropped 1.9% to ₹797.40 after net in the second-quarter decreased 2.6% from a year ago to ₹962.24 crore.

Total revenues in the quarter increased 3.8% to ₹8,125.55 crore.

Zee Entertainment Enterprises Limited jumped 3.9% to ₹385.60 after the most watched network said net in the second-quarter slid 1.5% from a year ago to ₹243.76 crore or $40 million.

Net revenues in the quarter fell 2.5% to ₹1,407.84 crore or $210 million.