NEW YORK — The stock market fell today as a poor earnings report from Macy’s cast doubt on the outlook for consumer spending, a vital component of the U.S. economy.
Other department store stocks also fell after Macy’s reported disappointing earnings for the second quarter and cut its forecast for the year.
The stock market’s early summer rally has fizzled out after a strong July, and August is shaping up to be a lackluster month as many traders and investors take their summer breaks. The major indexes have drifted lower in the past week after climbing to all-time highs at the start of the month.
“I do feel we are going to have a slight negative bias (to stocks), at least until Labor Day,” said Chris Bertelsen at Global Financial Private Capital. “We’ve had a pretty significant run in the market, people are taking some of the stocks that have had big runs, and are moving away from them.”
The Standard & Poor’s 500 index was down six points, or 0.3 percent, to 1,688 as of 12:22 p.m. Eastern Daylight Time. The index is up just 0.1 percent for the month. In July it jumped 5 percent.
The Dow Jones industrial average fell 88 points, or 0.6 percent, to 15,363. The Nasdaq composite fell 10 points, or 0.3 percent, to 3,674.
Macy’s, which operates its namesake stores and Bloomingdales, dropped $2.05, or 4.2 percent, to $46.45 after its profit fell short of analysts’ estimates. Macy’s blamed shoppers’ reluctance to spend for a slip in sales.
Nordstrom, a rival to Macy’s, fell 91 cents, or 1.5 percent, to $59.27. The company reports its second-quarter earnings on Thursday.
Apple rose above $500 for the first time since January, climbing $11.6, or 2.4 percent, to $501, in early afternoon trading. The company’s stock jumped 4.75 percent Tuesday after activist investor Carl Icahn said he thinks Apple should be doing more to revive its stock price. Icahn also said he had a large, but unspecified stake, in the company.
The stock market is adjusting to the prospect of higher interest rates as the Federal Reserve contemplates easing back on its stimulus. The central bank is buying $85 billion of bonds a month to keep long-term interest rates low and encourage borrowing.
The yield on the 10-year Treasury note slipped to 2.71 percent from 2.72 percent Tuesday. The yield, which rises when investors sell bonds, jumped 0.10 percentage points Tuesday on optimism that global growth was set to pick up as the economies that use the euro emerge from recession.
Big dividend payers like utilities and phone companies have been slumping since May as Treasury yields have risen because some investors bought those stocks as an alternative to bonds as a source of investment income. The yield on the 10-year note has risen one full percent point since May 3, when it hit its low of the year, 1.63 percent.
Home builders have also been falling because government bond yields are used to set mortgage rates. If mortgage rates increase sharply, it could cool demand for homes and squelch a recovery in the housing market.
PulteGroup dropped for a seventh day out of the past eight, declining 26 cents, or 1.7 percent, to $15.13. Lennar dropped 59 cents, or 1.8 percent, to $31.57.
The price of oil fell 29 cents, or 0.3 percent, to $106.57 a barrel. Gold rose $11.70 cents, or 0.9 percent, to $1,332.40 an ounce.
The dollar fell against the euro but rose against the Japanese yen.
Among stocks making big moves:
— SeaWorld, which made its stock market debut in April, slumped $1.10, or 3 percent, to $35.21 after the company reported a loss for the second quarter as foul weather and higher ticket prices kept crowds away.
— Steinway Musical Instruments jumped $2.41, or 6.3 percent, to $40.67 after agreeing to be purchased for $499 million by the investment firm Paulson & Co.