MARKET SNAPSHOT: Dow Closes Higher For 3rd Session In A Row, But Broader Market Ends Slightly Lower
S&P seen at 'inflection point'; Home Depot falls after results
The Dow industrials managed to eke out a third day of gains, but overall the main benchmarks ended little changed amid better-then-expected retail sales data and an abatement of tensions between the U.S. and North Korea.
The Dow Jones Industrial Average finished up 5.28 points, or less than 0.1%, at 21,998.99, following a gain of up to 45 points earlier, with shares of Home Depot Inc.(HD) and Nike Inc.(NKE) representing the largest decliners, while American Express Co.(AXP) and Apple Inc.(AAPL) were the biggest gainers.
The S&P 500 index declined 1.23 points to finish at 2,464.61, with telecom and consumer-discretionary stocks representing the largest decliners, while consumer-staples and utilities stocks were the biggest gainers.
The Nasdaq Composite Index slipped 7.22 points, or 0.1%, to close at 6,333.01.
All three indexes had traded higher earlier in the session, and at its peak of the day, the S&P moved within 1 percentage point of record levels.
Home Depot shares finished down 2.7% even as the Atlanta-based home-improvement company raised its outlook (http://www.marketwatch.com/story/home-depot-raises-guidance-for-second-time-in-2017-2017-08-15) for the second time this year and reported second-quarter results that topped Wall Street estimates. The stock was the biggest drag on the Dow on Tuesday.
Read: Home Depot's stock cuts about 30 points from Dow industrials (http://www.marketwatch.com/story/home-depots-stock-cuts-more-than-30-points-from-dow-industrials-2017-08-15)
Retail sales rose 0.6% in July (http://www.marketwatch.com/story/us-retail-sales-soar-in-july-to-7-month-high-2017-08-15), above expectations for a 0.4% rise, helped by strong demand for new autos and Amazon's Prime Day shopping specials, but for the most part, retail stocks suffered on Tuesday.
That focus on strength in Amazon and auto sales raises concerns about the broader retail space, especially with Home Depot selling off, said Ian Winer, head of the equities division at Wedbush Securities, in an interview.
"The fact that [Home Depot] is selling off after a good quarter is disconcerting to some people," Winer said. "The big question is what's going on with the U.S. consumer," he said.
Amazon.com Inc.(AMZN) shares finished down less than 0.1% while traditional retailers closed with steeper losses as shares of Target Corp.(TGT) ended down 2.6%, Nordstrom Inc.(JWN) and Kohl's Corp.(KSS) shares both closed down 1.5%, and Dollar General Corp.(DG) shares fell 3.8%. Bucking the trend, Wal-Mart Stores Inc. (WMT) shares finished up 0.1%.
Tuesday's weak showing comes after an upbeat close on Monday (http://www.marketwatch.com/story/dow-futures-flirt-with-100-point-gain-as-north-korea-fears-put-on-back-burner-2017-08-14), when the S&P gained 1% for the first time in three months as the verbal standoff between the U.S. and North Korea cooled. The Nasdaq rallied 1.3% while the Dow ended 0.6% higher. The blue-chip average has now gone 62 sessions without a 1% move in either direction, according to data from WSJ Market Data Group.
"We're at an inflection point, and right now the market is trying to figure out whether this is still a valid, healthy trend higher, or the start of a deeper pullback of some kind," said John Kosar, chief market strategist at Asbury Research.
Tensions between the two nations appeared to ease on Tuesday, with North Korean leader Kim Jong Un deciding not to launch a threatened missile attack on Guam (http://www.marketwatch.com/story/north-korea-steps-back-from-plan-to-launch-missiles-at-guam-2017-08-14), according to Pyongyang's state media. The leader, however, warned that he could change his mind "if the Yankees persist in their extremely dangerous reckless actions."
The isolated nation said last week it would complete its plans to strike Guam in mid-August.
The dollar initially welcomed the de-escalation of the conflict and economic data (http://www.marketwatch.com/story/pound-slides-below-129-as-uk-inflation-unexpectedly-stalls-2017-08-15)on Tuesday, but ticked lower. The ICE Dollar Index , which measures the dollar against six rival currencies, declined less than 0.1% to 93.81, compared with a 0.4% gain on Monday.
The recovery from last week's selloff--the worst for major indexes in months--was the latest example of investors using any weakness to buy on market declines (http://www.marketwatch.com/story/a-problem-for-buy-the-dip-investors-no-dips-to-buy-2017-08-08). It has been an atypically long time since the market fell even 3% from a peak, let alone more.
(https://twitter.com/michaelbatnick/status/897426975568121865)
In what could become a headwind, however, the rally is occurring against a backdrop of falling profit forecasts (http://www.marketwatch.com/story/stock-rally-is-occurring-against-a-backdrop-of-falling-profit-forecasts-2017-08-14).
Economic news: The import price index rose 0.1% last month (http://www.marketwatch.com/story/cost-of-imported-goods-rise-for-first-time-in-three-months-2017-08-15), its first gain in three months.
See:MarketWatch's economic calendar (http://www.marketwatch.com/economy-politics/calendars/economic)
There were no Federal Reserve officials scheduled to speak on Tuesday.
Stock movers: Shares of Dick's Sporting Goods Inc.(DKS) plunged 23% after the retailer reported (http://www.marketwatch.com/story/dicks-sporting-goods-shares-plummet-after-earnings-miss-profit-warning-2017-08-15)second-quarter earnings that missed estimates and issued a profit warning.
Coach Inc.(COH) stock slumped (http://www.marketwatch.com/story/coachs-stock-drops-after-profit-beats-expectations-but-sales-fall-shy-2017-08-15)more than 15% Tuesday after the luxury-goods retailer reported fiscal fourth-quarter net profit that rose to $151.7 million, or 53 cents a share, from $81.5 million, or 29 cents a share, from a year ago.
Shares of General Electric Co.(GE) shed 0.9% after a Securities and Exchange Commission filing late Monday showed Warren Buffett's Berkshire Hathaway Inc.(BRKA) (BRKA) had dropped its position the conglomerate (http://www.marketwatch.com/story/berkshire-hathaway-drops-ge-starts-synchrony-position-2017-08-14).
Berkshire also trimmed positions in International Business Machines Corp.(IBM), Costco Wholesale Corp.(COST) and Sirius XM Holdings Inc.(SIRI), while buying shares of Synchrony Financial(SYF).
Wynn Resorts Ltd.(WYNN) shares rose 6.4% after Deutsche Bank upgrade the stock to a buy rating.
Advance Auto Parts Inc.(AAP) shares dropped 20% the auto-parts retailer reported weaker-than-expected profit (http://www.marketwatch.com/story/advance-auto-parts-shares-slide-7-after-profit-miss-2017-08-15) for the quarter.
J.C. Penney Co.(JCP) shares declined 2.3% and were suffering from their worst five-day stretch in over 45 years (http://www.marketwatch.com/story/jc-penneys-stock-suffering-worst-5-day-stretch-in-over-45-years-2017-08-15).
VF Corp.(VFC), the parent of clothing brands such as North Face and Timberland, late Monday reached a deal to buy Williamson-Dickie Manufacturing Co (http://www.marketwatch.com/story/vf-parent-of-north-face-to-acquire-dickies-owner-in-820-million-apparel-deal-2017-08-14). for $820 million in cash. Shares rose 0.6%.
TJX Cos.(TJX) rose 0.8% after it reported second-quarter earnings and revenue that beat expectations (http://www.marketwatch.com/story/tjx-shares-rise-after-earnings-revenue-beat-2017-08-15).
Other markets: Stocks in Asia closed mostly higher (http://www.marketwatch.com/story/asian-markets-bounce-back-as-north-korean-threat-recedes-2017-08-14), while European markets finished slightly higher (http://www.marketwatch.com/story/european-stocks-cheer-north-koreas-pullback-on-missile-threat-2017-08-15) on continued North Korea relief.
Oil prices (http://www.marketwatch.com/story/oil-at-3-week-low-pressured-by-growth-in-us-shale-output-2017-08-15) slipped 0.1% to settle at $47.55 a barrel, while gold prices (http://www.marketwatch.com/story/gold-sinks-for-second-straight-day-as-north-korea-backs-off-guam-threat-2017-08-15) settled down 0.8% at $1,279.70 an ounce and most other havens retreated. The 10-year benchmark Treasury note was up firmly at 2.264% as prices fell. Bond prices move inversely to yields.
--Sara Sjolin in London contributed to this article.
(END) Dow Jones Newswires
August 15, 2017 20:46 ET (00:46 GMT)