US stocks dip as phone stocks fall; earnings hit retailers

AP News
|
Posted: Aug 17, 2016 10:47 AM
US stocks dip as phone stocks fall; earnings hit retailers

NEW YORK (AP) — U.S. stocks are trading lower Wednesday morning as losses for phone and utility companies continue to drag the market from its recent record highs. Retailers including Target and Lowe's are skidding after disappointing earnings. The Federal Reserve will release minutes from its July meeting in the afternoon.

KEEPING SCORE: The Dow Jones industrial average fell 58 points, or 0.3 percent, to 18,493 as of 10:25 a.m. Eastern time. The Standard & Poor's 500 index gave up 6 points, or 0.3 percent, to 2,171. The Nasdaq composite lost 16 points, or 0.3 percent, to 5,211. Phone companies and utilities were set to take the biggest losses for the second day in a row. Those stocks have been surging for most of this year as investors were attracted to their safety and high dividend yields, but lately investors have shifted their money to other industries, including technology and finance.

OFF TARGET: Retailer Target skidded after it cut its annual profit forecast and lowered its estimates for sales at older stores. Target is facing stiff competition and analysts say it's had trouble with grocery sales. The stock fell $4.97, or 6.6 percent, to $70.51.

LIVING FOR THE CITY: Urban Outfitters jumped after it disclosed solid second-quarter results. Sales at older stores improved, surprising analysts who expected a decline. The stock gained $5, or 16 percent, to $36.24.

FLIP TO THE LAST PAGE: Barnes & Noble tumbled after the book seller said CEO Ronald Boire is leaving after less than a year. The company said its board determined that Boire was not a good fit. Chairman and former CEO Leonard Riggio, who was scheduled to retire next month, will stay with the company as it seeks a new CEO.

Barnes & Noble has been cutting costs and closing stores as it copes with people doing more of their shopping online and at discount stores. Its stock sank $1.46, or 10.9 percent, to $11.92.

GOING LOWE-R: Home improvement retailer Lowe's cut its annual profit forecast after it reported mixed quarterly results including lower-than-expected earnings and weak sales at older stores. Its stock slid $4.95, or 6.1 percent, to $76.53.

Home Depot posted solid results Tuesday but traded slightly lower.

TURNING OUT THE LIGHTS: Lighting maker Cree forecast disappointing earnings for the current quarter, and its sales estimate was far weaker than analysts expected. Cree shares slumped $4.18, or 15.2 percent, to $23.30.

THAT WASN'T EASY: Staples' quarterly results were about equal to analyst projections, but the office supply company said its sales will continue to decline in the current quarter and fell 77 cents, or 8.2 percent, to $8.57.

ENERGY: Benchmark U.S. crude shed 42 cents to $46.16 a barrel in New York. Brent crude, used to price international oils, lost 17 cents to $49.06 a barrel in London.

FED WATCH: Wednesday's release of notes from the Fed's July meeting will provide insight into the debate among board members over when to raise rates. The Fed's decision to leave rates unchanged has weakened the dollar, helping exporters. Investors are trying to figure out if the Fed will raise rates again later this year.

BONDS, CURRENCY: Bond prices inched higher and the yield on the 10-year Treasury note fell to 1.56 percent from 1.58 percent. The dollar rose to 100.48 yen from 100.25 yen. The euro dipped to $1.1266 from $1.1277.

HONG KONG STOCK LINK: China's Cabinet approved an initiative that would give foreign investors more access to Chinese stocks by linking exchanges in Hong Kong and the mainland city of Shenzhen. Hong Kong is Chinese territory but its financial system is open to foreign investors while mainland markets are sealed off. A similar measure to link Hong Kong with the Shanghai stock exchange took effect in 2014.

OVERSEAS: France's CAC-40 dropped 0.9 percent while Germany's DAX shed 1.4 percent. London's FTSE 100 declined 0.6 percent. The Hang Seng in Hong Kong was off 0.5 percent and in Tokyo the Nikkei 225 gained 0.9 percent. South Korea's Kospi rose 0.9 percent.

____

AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP . His work can be found at http://bigstory.ap.org/journalist/marley-jay