Declines in Shares of Retailers Pressure U.S. Stocks

By Michael Wursthorn and Justin Yang Features Dow Jones Newswires

U.S. stocks mixed as retailers fall

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-- Global markets in Europe and Asia extend gains

-- Havens including gold fall

Shares of several major retailers slid after their quarterly reports disappointed investors, pressuring U.S. stock indexes.

Dick's Sporting Goods, Coach and Advance Auto Parts were among the companies that fell short of expectations and contributed to declines in consumer-discretionary shares. The S&P 500 fell less than 0.1%, a day after it posted its biggest gain since April.

Despite some weakness in brick-and-mortar retailers, strong corporate results over all have kept major indexes climbing, investors and analysts said.

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"In the market, what matters is earnings, earnings, earnings," said Doug Foreman, chief investment officer of investment firm Kayne Anderson Rudnick. "Most of the world is showing a dramatic improvement in corporate profitability and earnings growth, which has been pretty rare."

The Dow Jones Industrial Average rose 5 points, or less than 0.1%, to 21999. The Nasdaq Composite declined 0.1%.

Gains in shares of financial companies helped offset retailers' losses.

Synchrony Financial rose more than 4%, making it one of the S&P 500's biggest gainers, on news that Warren Buffett's Berkshire Hathaway had opened a large investment in the biggest U.S. store credit-card issuer. The financials sector of the S&P 500 rose 0.2%.

Retailers' earnings were mixed. Dick's Sporting Goods fell 23% after same-store sales fell short of expectations in the latest quarter and the company lowered its forecast for annual earnings. Advance Auto Parts shed 20% after lowering its 2017 guidance and missing analysts' estimates on profits. Coach, whose profits beat expectations but sales fell short, was down 15%.

Home Depot said it grew same-store sales and raised its outlook for the second time this year. Shares fell 2.65%.

Shares of TJX Companies, the parent of the T.J. Maxx, Marshalls and HomeGoods off-price chains, added 0.8% after reporting strong quarterly sales.

Shares of many brick-and-mortar retailers have tumbled this year as increased competition from e-commerce giants like Amazon.com have cut into profits.

The Commerce Department said Tuesday that sales at retailers and restaurants rose 0.6% from a month earlier, the biggest jump since December, attributing much of the increase to internet sales.

"The source of the retail sales is still the non big-box stores," said Tom Stringfellow, chief investment officer of Frost Investments. "It's the internet...It's Amazon Prime."

Stock markets around the world were relatively calm Tuesday after swinging last week following some weak earnings and geopolitical tensions. The Stoxx Europe 600 rose nearly 0.1%, while Japan's Nikkei Stock Average added 1.1%.

Gold for August delivery fell 0.8% to $1,273.70 an ounce.

Write to Michael Wursthorn at Michael.Wursthorn@wsj.com

(END) Dow Jones Newswires

August 15, 2017 16:59 ET (20:59 GMT)