Sharp losses for retailers pull stock U.S. indexes lower

Marley Jay, The Associated Press</span>
Published Tuesday, August 15, 2017 12:20AM EDT
Last Updated Tuesday, August 15, 2017 1:01PM EDT

NEW YORK -- U.S. stocks are mostly lower Tuesday as sporting goods companies and car parts retailers slump. Bond prices are falling and yields are climbing, which is giving banks a lift. Stocks are coming off their biggest one-day gain in more than three months as the market recovered from last week's turmoil.

KEEPING SCORE: The Standard & Poor's 500 index dipped 2 points, or 0.1 per cent, to 2,463 as of noon Eastern time. The Dow Jones industrial average remained at 21,993. Nasdaq composite fell 9 points, or 0.1 per cent, to 6,331. The Russell 2000 index of smaller-company stocks shed 8 points, or 0.6 per cent, to 1,385.

UN-SPORTING: Dick's Sporting Goods cut its annual forecast after a weak second quarter. The sporting goods chain said athletic apparel sales were weak and that it plans to do more marketing and cut prices as it tries to keep its market share. Its stock plunged $6.97, or 20 per cent, to $27.94.

Companies that make and sell sporting goods also skidded. Foot Locker fell $1.98, or 4 per cent, to $47.34. Nike shed $1.18, or 2 per cent, to $58.61 and Under Armour lost 71 cents, or 4.1 per cent, to $16.40. Hibbett Sports dropped $1.40, or 10 per cent, to $12.55.

PARKED: Auto parts retailer Advance Auto Parts tumbled after it slashed its annual forecasts. The company and its competitors are facing weakening demand because car sales are slowing down from their recent record pace. Meanwhile competition from online retailers is growing. Advance Auto Parts dropped $27.01, or 24.7 per cent, to $82.31. Its competitors held up far better. O'Reilly Automotive gave up $1 to $197.44 and AutoZone sank $9.18, or 1.7 per cent, to $516.14. All three have taken steep losses this year.

BERKSHIRE BUYING AND SELLING: Warren Buffett's Berkshire Hathaway bought stock in Synchrony Financial and picked up more shares of Bank of New York Mellon. It sold its remaining shares of General Electric and continued to reduce its stake in IBM. Synchrony gained $1.18, or 4 per cent, to $30.82 and Bank of New York Mellon picked up 27 cents to $53.10. GE fell 20 cents to $25.16.

RETAIL WOES: Home improvement retailer Home Depot lost $4.57, or 3 per cent, to $149.69 in spite of a solid quarterly report.

Luxury retailer Coach tumbled after its fourth-quarter sales and its profit forecast for the current fiscal year came up short of analyst estimates. Its shares fell $6.78, or 14.1 per cent, to $41.14.

BONDS: Bond prices fell. The yield on the 10-year Treasury note rose to 2.25 per cent from 2.22 per cent. Fifth Third Bancorp rose 34 cents, or 1.3 per cent, to $27.02 and Discover Financial Services added 90 cents, or 1.5 per cent, to $61.40.

DRILLING DOWN: Offshore oil drilling rig company Transocean said it will buy Songa Offshore for $1.2 billion in cash. The deal expands Transocean's backlog as it continues to deal with low oil prices, but it will saddle the company with even more debt. Transocean had about $6.6 billion in long-term debt at the end of June, and investors value the company at about $3 billion. Its stock gave up 45 cents, or 5.4 per cent, to $7.94.

ECONOMICS: Consumers went out shopping in a big way in July and U.S. retail sales grew by the biggest amount this year. Retail sales have not been great in 2017, and consumer spending accounts for around 70 per cent of economic activity. The latest result is a good sign for overall economic growth.

ENERGY: U.S. crude oil lost 32 cents to $47.27 a barrel in New York. Brent crude, the international standard, slipped 36 cents to $50.37 a barrel in London.

CURRENCIES: The dollar rose to 110.47 yen from 109.63 yen. The euro fell to $1.1728 from $1.1782.

OVERSEAS: France's CAC 40 was up 0.4 per cent and the German DAX rose 0.1 per cent. Britain's FTSE 100 was 0.4 per cent higher. In Japan the benchmark Nikkei 225 gained 1.1 per cent and Hong Kong's Hang Seng slipped 0.3 per cent. Markets in South Korea were closed for a national holiday.

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