Sunday, Jun 24, 2018
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Stock Market

Indexes sink on Wall Street following the Christmas holiday

Retailers slump on weak sales

NEW YORK  — Retailers pulled stocks lower today as U.S. markets reopened following the Christmas holiday.

The Dow Jones industrial average fell 49 points to 13,090 as of noon. The Standard & Poor's 500 index fell seven to 1,419 and the Nasdaq composite lost 19 to 2,993.

Trading was quiet. European markets were still closed.

Major U.S. retailers fell following a glum report on U.S. holiday sales. Macy's and Urban Outfitters lost 3 percent. Sears Holdings fell nearly 5 percent.

The MasterCard Advisors SpendingPulse report found that sales of electronics, clothing, jewelry and home goods increased just 0.7 percent in the two months before Christmas compared with the same period last year.

That's well below the growth of 3 to 4 percent growth that analysts had expected and the worst performance since 2008, when spending shrank during the Great Recession. Last year sales climbed 4 to 5 percent during November and December, according to ShopperTrak.

The disappointing holiday sales figures outweighed the latest hopeful indicator on the U.S. housing market.

Home prices rose in most major U.S. cities in October compared with the same month a year ago, according to the latest Standard & Poor's/Case-Shiller national home price index. Sales rose at the same time the supply of available homes declined. The index increased 4.3 percent, the largest year-over-year jump in two and a half years, when a homebuyer tax credit temporarily boosted sales.

Retailers and other consumer discretionary stocks led the market lower. Macy's gave up $1.05 to $36.48, Target fell 73 cents to $58.81, Urban Outfitters fell $1.21 to $38.09 and Sears Holdings fell $1.80 to $38.47. Coach, the luxury handbag maker, sank $3.20 to $54.32, a decline of 6 percent, the biggest in the S&P 500 index.

Traders were also watching to see if a budget agreement materializes in Washington. President Barack Obama cut short his Christmas vacation in Hawaii and was returning to Washington later today to resume budget talks with Congressional Republicans.

The yield on the benchmark 10-year Treasury note edged down to 1.75 percent from 1.77 percent Monday. Trading was closed Tuesday for the Christmas holiday. Oil prices rose. Benchmark crude gained $2.37 to $90.98 a barrel.

Japanese stocks hit a nine-month high as a pro-business government prepared to assume leadership. The Nikkei 225 index surged 1.5 percent to 10,230.36.

Japan's new prime minister, Shinzo Abe, has put pressure on the Bank of Japan to raise its inflation target. The goal is to extricate the country from two decades of deflation, or declining prices, which has deadened the world's third-largest economy.

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