Dow hobbled by Nike drop after Foot Locker earnings
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U.S. stock benchmarks closed firmly lower on Friday to register another unsightly week of losses as low volumes and skittish investors left Wall Street especially vulnerable to pullbacks.
The Dow Jones Industrial Average finished down 76.22 points, or 0.4%, at 21,674.51, having been down by as much as 110 points earlier in the session. The biggest drag on the average was Nike Inc.(NKE), with shares falling 4.4%. Shares of Cisco Systems Inc.(CSCO) finished down 2.2% and Home Depot Inc.(HD) shares declined 1.5%.
The S&P 500 index declined 4.46 points, or 0.2%, to close at 2,425.55, with real estate, telecom and consumer-discretionary stocks leading the index lower.
The tech-laden Nasdaq Composite Index closed down 5.39 points, or 0.1%, at 6,216.53. For the week, the Nasdaq finished down 0.6%.
Both the Dow and the S&P 500 finished Friday for a second week of losses, with the Dow suffering its largest two-week percentage decline since mid-September 2016. For the current week, the Dow shed 0.8% and the S&P 500 lost 0.7%. Friday marked the fourth week of losses for the Nasdaq, its longest weekly losing streak since May 2016.
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Stocks shifted between gains and losses Friday as President Donald Trump's strategist Stephen Bannon departed the White House, following the prior day's selloff fueled by a terrorist attack in Barcelona and rumors that Trump's economic adviser Gary Cohn might resign.
Stocks had a short-lived surge (http://www.marketwatch.com/story/us-stocks-rise-to-session-highs-after-report-of-likely-bannon-ouster-2017-08-18) following a New York Times report that Bannon, a key adviser to President Trump, would be dismissed, which the White House later confirmed (http://www.marketwatch.com/story/stephen-bannon-being-removed-from-white-house-reports-2017-08-18). Earlier, traders cited a report from Axios (https://www.axios.com/white-house-review-nears-end-officials-expect-bannon-firing-2474443198.html) saying that Bannon's potential ouster could be a reason for the reversal. Bannon is considered a controversial figure in the White House, and is viewed as one of the main contributors to the president's combative rhetoric discussing a white-supremacist rally over the weekend that resulted in one fatality.
"The news of the day around the While House has no long term impact," said Paul Nolte, portfolio manager at Kingsview Asset management, in an interview. Nolte doesn't even see a lot of relevance in the breakup of the president's economic advisory councils, noting that councils of past presidents never really produced much.
What matters to markets is whether policy comes out of the White House and economic growth rates, Nolte said.
"I don't know how Bannon leaving is good for the $18 trillion U.S. economy but we are in a bit of news vacuum right now. If someone is banging a drum in the corner of the room, then we're going to look at the drum," said Mike Antonelli, equity sales trader at Robert W. Baird & Co, referring to the seasonally lightly traded August period.
The market had also been spooked by reports on Thursday that Gary Cohn was planning to resign as an economic adviser to the president. The White House has countered those rumors.
See:Team Trump losing Gary Cohn could crash the stock market, warns Yale professor (http://www.marketwatch.com/story/team-trump-losing-gary-cohn-could-crash-the-stock-market-warns-yale-professor-2017-08-17)
Cohn is "seen as the glue holding Trump's pro-business agenda together," Deutsche Bank's strategists said. "The fears are that if he goes, you take a further step back from tax cuts and deregulation."
Trading on Friday also comes against the backdrop of a terror attack in Spain, which happened on Thursday, with a van plowing into crowds in one of Barcelona's busiest venues, killing at least 14 people and injuring scores. Islamic State has claimed responsibility (http://www.marketwatch.com/story/islamic-state-takes-credit-for-deadly-barcelona-attack-on-pedestrians-2017-08-17) for the terror attack. Hours after the Barcelona incident, police killed five alleged terrorists following a separate attack that hurt seven people in Cambrils, a Spanish town southwest of Barcelona.
European stocks settled lower on Friday following the attacks. Spain's IBEX 35 index was among the hardest hit, down 0.6% at 10,385.70.
Stock movers: Shares in Ross Stores Inc.(ROST) rallied nearly 10.7% after the off-price retailer late Thursday reported earnings and sales above forecasts (http://www.marketwatch.com/story/ross-stores-shares-rally-as-q2-earnings-top-views-company-forecasts-sales-growth-2017-08-17).
Applied Materials Inc.(AMAT) shares gained up 2.7% after the chip-equipment supplier reported better-than-expected quarterly results.
Calpine Corp.(CPN) soared nearly 10.5% after a Wall Street Journal report late Thursday said Energy Capital Partners is closing in on a $17 billion deal (http://www.marketwatch.com/story/energy-capital-partners-nears-17-billion-deal-to-buy-calpine-report-2017-08-17) to acquire the power company.
U.S.-listed shares of Infosys Ltd.(500209.BY) slid 7.2% after Vishal Sikka on Friday resigned as chief executive (http://www.marketwatch.com/story/infosys-ceo-resigns-citing-resistance-to-change-2017-08-18).
Foot Locker Inc. (FL) plunged 28% after the sports-apparel company significantly missed profit forecasts (http://www.marketwatch.com/story/foot-locker-shares-tumble-15-after-profit-and-sales-fall-short-of-estimates-2017-08-18). Along with shares of Nike falling after Foot Locker's results, shares of Under Armour (http://www.marketwatch.com/story/foot-lockers-stock-plunge-drags-under-armour-and-nike-down-with-it-2017-08-18)(UAA) also dropped 3.9%.
Deere & Co.(DE) opened at a three-month low, with shares down 5.4% after quarterly sales at the farming-equipment company missed expectations (http://www.marketwatch.com/story/deeres-stock-drops-after-sales-miss-offsets-profit-beat-2017-08-18).
On an upbeat note in Friday's earnings, Estée Lauder Cos.(EL) climbed 7.7%. Both earnings and profit at the beauty company beat estimates (http://www.marketwatch.com/story/estee-lauder-shares-rise-nearly-5-after-earnings-beat-2017-08-18).
Economic news: The market mostly ignored a reading of consumer sentiment for August that was its highest since January at 97.6, compared with 93.4 in the prior month.
Other markets:Asia markets closed broadly lower (http://www.marketwatch.com/story/nikkei-slumps-to-3-month-low-as-asian-markets-dip-2017-08-17), with Japan's Nikkei 225 index finishing at a three-month low.
Oil prices (http://www.marketwatch.com/story/oil-edges-higher-as-traders-weigh-output-weaker-dollar-2017-08-18) rose 3% Friday to settle at $48.51 a barrel. Metals were higher across the board, as gold (http://www.marketwatch.com/story/gold-retakes-1300-level-for-first-time-in-9-months-2017-08-18) settled down less than 0.1% at $1,291.60 an ounce after rising briefly above $1,300 an ounce on increased haven demand. The 10-year Treasury note was at 2.19%, while the dollar was trading lower on Friday. The ICE Dollar Index was down less than 0.1% at 93.40.
--Sara Sjolin in London contributed to this article.
(END) Dow Jones Newswires
August 18, 2017 16:39 ET (20:39 GMT)