Wall Street hit by weak earnings, Brexit concerns

4 weeks ago DieselGasoil Comments Off on Wall Street hit by weak earnings, Brexit concerns

(Reuters) – U.S. stocks fell on Thursday as a batch of weak earnings and Brexit-related concerns sparked a sixth day of selling, with high-growth stocks such as Amazon.com Inc (AMZN.O) and Facebook Inc (FB.O) taking a hit.

Wall Street hit by weak earnings, Brexit concerns

Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., November 12, 2018. REUTERS/Brendan McDermid

Ten of the 11 major S&P sectors fell, with more than 1 percent losses in consumer discretionary .SPLRCD, defensive real estate .SPLRCR and utilities .SPLRCU indexes.

Shares in the world’s largest retailer Walmart Inc (WMT.N), which was up earlier after beating quarterly comparable sales estimates, reversed course to trade down 0.7 percent.

The results come in a big week for retail earnings, with department store operator Macy’s Inc (M.N) raising its annual earnings forecast on Wednesday, signaling a strong holiday shopping season.

However, J.C. Penney Co Inc (JCP.N) slumped 9 percent after quarterly comparable-store sales fell short of analysts’ estimates.

U.S. retail sales rebounded sharply in October as demand for motor vehicles and building materials surged. The Commerce Department said retail sales rose 0.8 percent last month, above the expected 0.5 percent rise.

“Market’s choosing not to pick and spare (retail) numbers and most of the retailers are looking forward to the holiday season,” said Rick Meckler, a partner at Cherry Lane Investments, New Vernon, New Jersey.

“But right now the focus is on rising interest rates and the potential for long-term trade disruptions with China.”

Markets earlier got some relief following news that China had delivered a written response to U.S. trade demands ahead of an expected meeting between President Donald Trump and Chinese President Xi Jinping at the end of the month.

“Most people thought it would be resolved but it has dragged on and the optimism turned to pessimism,” said Meckler.

U.S. stocks got off to a shaky start this month after a sharp selloff in October as investors weigh the prospect of rising interest rates, slowing global economy and trade tensions.

Political worries in Europe escalated after a series of resignations in British Prime Minister Theresa May’s government threw into doubt her long-awaited Brexit agreement and reports of anti-euro comments from an Italian official.

At 10:07 a.m. ET the Dow Jones Industrial Average .DJI was down 134.87 points, or 0.54 percent, at 24,945.63, the S&P 500 .SPX was down 15.23 points, or 0.56 percent, at 2,686.35 and the Nasdaq Composite .IXIC was down 23.76 points, or 0.33 percent, at 7,112.64.

Cisco Systems Inc (CSCO.O) rose 3.3 percent after the network gear maker reported better-than-expected quarterly results, benefiting from demand for its routers and switches.

Apple Inc (AAPL.O) rose half a percent after five days of losses, helping the S&P technology index .SPLRCT gain 0.3 percent.

Facebook Inc (FB.O) dropped 1.4 percent. Hedge funds Tiger Global Management, Appaloosa LP and Soros Fund Management dissolved their stakes in the social media giant on Wednesday.

Amazon.com Inc (AMZN.O) fell 2.8 percent, pulling the S&P consumer discretionary index .SPLRCD down 2.08 percent.

KB Home (KBH.N) slumped 17 percent after the company cut fourth-quarter revenue forecast. Shares of other homebuilders including PulteGroup Inc (PHM.N), Toll Brothers Inc (TOL.N) and Lennar Corp (LEN.N) tumbled.

Declining issues outnumbered advancers for a 2.20-to-1 ratio on the NYSE and a 1.23-to-1 ratio on the Nasdaq.

The S&P index recorded no new 52-week highs and 16 new lows, while the Nasdaq recorded 3 new highs and 91 new lows.

Reporting by Sruthi Shankar and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta