Wall Street fell on Friday and was on track to end the week lower as tepid economic data weighed on banks and worries deepened over Nordstrom and other department stores.
Wall Street fell on Friday and was on track to end the week lower as tepid economic data weighed on banks and worries deepened over Nordstrom and other department stores. A risk-off sentiment gripped Wall Street this week after President Donald Trump unexpectedly fired his FBI chief, the potential fallout from which could delay Trump’s pro-growth goals to cut taxes and boost spending on infrastructure.Soft retail sales and monthly inflation data on Friday raised concerns about slow economic growth and questions about whether the Federal Reserve could maintain its hawkish outlook for interest rates this year.
Federal funds futures implied a 49-percent chance of two more rate hikes this year, compared with 54 percent shortly before the release of the data, CME Group’s FedWatch tool showed.Banks, which typically benefit from higher interest rates, dragged on the S&P 500 and Dow Jones Industrial Average. The S&P 500 financial sector fell 0.6 percent, while industrials were off 0.8 percent.
Department stores faced serious pressure for a second straight day after J.C. Penney reported lower-than-expected comparable-store sales, sending its shares down 14 percent.
Nordstrom dropped 10 percent after weak quarterly same-store sales.Macy’s fell 2.4 percent, bringing its loss to more than 18 percent in the past two sessions following its dismal quarterly report.The less-than-expected 0.4 percent month-over-month increase in April retail sales stirred fears about the retail sector as well as the economy.”The numbers were light again, people don’t seem to be spending money despite employment and income numbers being good. It’s concerning,” said Stephen Massocca, Senior Vice President at Wedbush Securities in San Francisco.
At 2:25 pm ET, the Dow Jones Industrial Average was down 0.2 percent to 20,878.36 points and the S&P 500 had lost 0.23 percent to 2,388.83.The Nasdaq Composite edged up 0.05 percent to 6,119.30.GE was the top percentage loser on the Dow, down 3.37 percent after Deutsche Bank downgraded its shares to “sell” from “hold”.Declining issues outnumbered advancing ones on the NYSE by a 1.32-to-1 ratio; on Nasdaq, a 1.38-to-1 ratio favored decliners.The S&P 500 posted 28 new 52-week highs and 11 new lows; the Nasdaq Composite recorded 77 new highs and 58 new lows.