Wall Street opened the week under heavy pressure on November 20, 2018, after disappointing results from major retailers and renewed weakness in technology shares sent the S&P 500 to a three-week low.
Target Corp shares fell 10.28 percent after third-quarter profit missed analysts’ estimates. The company said investments in its online business, higher wages and price cuts hurt margins. Kohl’s Corp dropped 9.42 percent after its full-year profit forecast came in below expectations.
The warnings from retailers added to investor anxiety heading into the holiday season, especially as markets were already dealing with worries about slowing global growth, peaking corporate earnings and higher interest rates.
Apple Inc lost 3.80 percent on concerns about weakening iPhone demand. The stock, which has helped lead the market through much of the bull run, fell to its lowest level since early May. Goldman Sachs also cut its price target on Apple for the second time in just over a week, saying the mix of price and features in the new iPhone XR may not have been well received outside the United States.
The tech-heavy Nasdaq sank to its lowest point in more than seven months and was down about 14.6 percent from its record closing high in late August. Christopher Larkin, senior vice president of trading at E-Trade Financial in New Jersey, said the market was facing multiple pressures, including rising rates, a strong dollar, tariff concerns between the United States and China and the oil selloff.
“Market has clearly run into some headwinds. We’ve got rising rates, strong dollar, concerns over tariffs between U.S. and China and we’ve got the oil selloff,” said Christopher Larkin, senior vice president of trading at E-Trade Financial in New Jersey.
“There are a lot of things working against the market right now... We’re seeing a couple of stocks, which are pretty popular specifically with retail investors, under quite a bit of pressure.”
Lowe’s Cos Inc fell 4.76 percent after it announced more restructuring plans in response to worse-than-expected comparable sales. TJX Cos Inc slipped 3.4 percent after its holiday-quarter earnings forecast missed estimates by a wide margin, while Ross Stores fell 6.94 percent after its fourth-quarter same-store sales outlook came in below analysts’ expectations.
The S&P 500 retailing index dropped 1.83 percent, extending its losing streak to eight straight sessions. At 13:05 a.m. EDT, the Dow Jones Industrial Average was down 455.04 points, or 1.82 percent, at 24,562.40. The S&P 500 was off 40.17 points, or 1.49 percent, at 2,650.56, while the Nasdaq Composite was down 91.79 points, or 1.31 percent, at 6,936.69.
Even so, the three major indexes had recovered from their session lows. The FANG group also trimmed earlier losses, and the Philadelphia SE semiconductor index edged 0.1 percent higher after clawing back declines.
Energy shares were another drag. The S&P energy index fell 2.92 percent as oil prices dropped another 5 percent on concerns about rising global supply. Kim Forrest, senior portfolio manager at Fort Pitt Capital Group in Pittsburgh, said thin holiday-week trading was making the selloff worse.
“We’re in a holiday week so there are fewer traders than normal and that’s a problem. Because whatever direction the markets go in, it’s exacerbated,” said Kim Forrest, senior portfolio manager at Fort Pitt Capital Group in Pittsburgh.
Declining stocks outnumbered advancers by 5.57-to-1 on the NYSE and by 2.73-to-1 on the Nasdaq. The S&P index recorded 20 new 52-week highs and 41 new lows, while the Nasdaq posted eight new highs and 244 new lows.
Reuters reported the story on November 20, 2018.
