US STOCKS-Wall St drops as Disney, Macy's lead rout in consumer stocks

  • Reuters
  • Stock Market News
US STOCKS-Wall St drops as Disney, Macy's lead rout in consumer stocks
Credit: © Reuters.

* Disney falls after rare earnings miss
* Macy's weak report weighs on other retailers
* Fossil hits 6-1/2 yr low on forecast cut
* Office Depot , Staples slump after calling off merger
* Indexes down: Dow 0.66 pct, S&P 0.47 pct, Nasdaq 0.43 pct

(Adds details, changes comment, updates shares)
By Tanya Agrawal
May 11 (Reuters) - U.S. stocks fell on Wednesday as weak
earnings reports from Walt Disney, Macy's and Fossil
reverberated across the consumer sector.
Disney DIS.N shares were down 4.5 percent at $101.82 after
the company posted a rare earnings miss. The stock was the
biggest drag on the Dow, accounting for about 33 points of the
index's 80 points fall.
Department store chain Macy's M.N tumbled 12 percent to
$32.58, while Fossil FOSL.O sank as much as 34 percent to a
six-and-a-half year low of $26.51 after the two companies
slashed their full-year forecasts.
Nine of the 10 major S&P sectors were lower, led by the
consumer discretionary index's .SPLRCD 1.42 percent drop.
The index was on track for its biggest one-day fall in three
months. The broader S&P retail index .SPXRT was down 1.45
"We're getting a lot of news on U.S. consumers today and it
isn't good news," said Kim Forrest, senior equity research
analyst, Fort Pitt Capital Group in Pittsburgh.
"Wages aren't rising and its quarters like these that show
that the consumer isn't too optimistic about the U.S. economy."
At 11:08 a.m. ET (1508 GMT) the Dow Jones industrial average
.DJI was down 118.51 points, or 0.66 percent, at 17,809.84,
the S&P 500 .SPX was down 9.79 points, or 0.47 percent, at
2,074.6 and the Nasdaq Composite .IXIC was down 20.54 points,
or 0.43 percent, at 4,789.34.
The weakness on Wednesday comes a day after the S&P 500
notched its biggest daily percentage gain in two months,
offering a spark to rekindle a two-month rally that had petered
out in mid-April.
Traders are struggling to find new catalysts to propel the
market back towards record highs due to underwhelming
first-quarter earnings and mixed economic data that provided
little clarity on the path of Federal Reserve's rate-hike path.
First-quarter earnings for S&P 500 companies have mostly
beaten analysts' expectations, but are still estimated to have
fallen 5.4 percent from a year ago, according to Thomson Reuters
Macy's weak report dragged down other department store
chains, with J.C. Penney JCP.N , Kohl's KSS.N , Nordstrom (NYSE: JWN )
JWN.N and Dillard's DDS.N falling between 2 to 6 percent.
Fossil's report, coupled with Macy's results, weighed on
other luxury retailers such as Movado MOV.N , which tumbled 10
percent and Michael Kors KORS.N , which dropped 12 percent.
Office Depot ODP.O slumped 39.5 percent to $3.69 after
terminating its planned merger with Staples SPLS.O . Staples
was down 17.3 percent at $8.56.
Declining issues outnumbered advancing ones on the NYSE by
1,619 to 1,181. On the Nasdaq, 1,571 issues fell and 1,012
The S&P 500 index showed 38 new 52-week highs and seven new
lows, while the Nasdaq recorded 41 new highs and 33 new lows.

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