Stock Market News for August 16, 2010 - Market News

Investors’ concerns about the pace of the economic recovery showed no signs of easing as some dour economic data aggravated worries that the economy is not going to rebound any time soon. A Commerce Department report that said retail sales rose 0.4% in July, below expectations of a 0.5% uptick, pointed to the fact that consumer spending still remains lackadaisical. Volume remained thin as investors refrained from building big positions.

The Dow Jones Industrial Average dropped nearly 17 points, extending its four-day drop to almost 400 points. The index is now down 1.2% for the year. The tech-heavy Nasdaq Composite index dropped 17 points, or 0.8%, to 2173.48. The widely followed S&P 500 index 4 points, or 0.4%, to 1079.25. For the week, the Dow average fell 3.3%, the S&P 500 declined 3.8% and the Nasdaq dropped 5%. On the New York Stock Exchange, declining issues were ahead of advancing shares by almost 4 to 3. Market’s measure of volatility, the CBOE Vix, rose above 26. It was markets’ worst week since July.

Retailer J.C. Penny’s (NYSE:JCP) lowered profit forecast for the year on expectations of weak consumer spending, coming a day after Kohl’s Corp. (NYSE:KSS) lowered quarterly earnings outlook, further worried investors as retail sales provide an important insight into consumer behavior and their spending habits. Shares in J.C. Penny fell 4%. Shares in Nordstrom (NYSE:JWN) fell more than 7% after the firm reported higher inventories.

All ten S&P 500 industry sectors closed lower on the week, led by losses in tech shares (-6.0%), with Cisco plunging 11.3%. A strengthening US dollar, up 3.2% against a basket of currencies, sent industrial shares off 5.2%. Financials dropped 4.7%; basic materials 4.3%, oil and gas 4.2%, consumer services 3.5%, health care 2.3%, consumer goods 2.1%, utilities 1.4%, and telecommunications 0.01%.

The earnings season is almost over, barring some key numbers from retailers. Home Depot (NYSE:HD), with 71 cents expected up from 64 cents; from Wal-Mart (NYSE:WMT), with 97 cents expected up from 88 cents, from Abercrombie and Fitch (NYSE:ANF), with 16 cents expected up from 3 cents, and from TJX Companies (NYSE:TJX), with 73 expected up from 61 cents.

Wednesday’s calendar covers numbers from Deere (NYSE:DE), expected to show a profit of $1.22 up from 99 cents a year earlier, from Target (NYSE:TGT) with earnings of 92 cents versus 79 cents expected and from Limited (NYSE:LTD) with earnings of 34 cents up from 19 cents estimated. Thursday sees Hewlett-Packard (NYSE:HPQ), which ousted its CEO Mark Hurd recently, with earnings of $1.08 estimated versus 91 cents, and from Gap (NYSE:GPS), with earnings of 35 cents, versus 33 cents a year ago.

Stock Market News for August 16, 2010 – Market News

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