Wall St Lower as Oil Price Drop Adds to Consumer Stock Woes
U.S. stocks were lower on Friday afternoon as a decline in oil prices added to the pressure from consumer stocks after strong April retail sales data was overshadowed by gloomy earnings reports from retailers.
The Nasdaq gave up early gains to trade flat as the drop in consumer stocks was offset by gains in technology shares, led by Apple and Nvidia.
Oil prices slipped on Friday as a strong dollar weighed and investors cashed in on gains during a three-day rally.
The U.S. Commerce Department said retail sales jumped 1.3 percent last month, the largest gain since March 2015 and a bigger rise than the 0.8 percent economists were expecting. Core retail sales, which excludes automobiles, gasoline, building materials and food services, also rose more than expected.
Consumer stocks, which have been under pressure this week after a string of feeble earnings reports, fell after two more department store operators, Nordstrom and J.C. Penney reported lower-than-expected sales.
Nordstrom, like Macy's, also cut its full-year forecast, stoking fears of weakening consumer spending, which accounts for more than two-thirds of U.S. economic activity.
"The retail sales that we are seeing today is backward. I would put less weight on backward-looking data and I would put more weight on management's discussion of guidance in the future, and that doesn't look good," said Mohannad Aama, Managing Director, Beam Capital Management LLC in New York.
"Investors are starting to build a mosaic of information suggesting that the consumer is not doing as well as you would expect."
At 12:46 p.m. ET (1646 GMT) the Dow Jones industrial average was down 66.91 points, or 0.38 percent, at 17,653.59.
The S&P 500 was down 5.86 points, or 0.28 percent, at 2,058.25.
The Nasdaq Composite was up 2.45 points, or 0.05 percent, at 4,739.79.
Eight of the 10 major S&P sectors were lower, led by the energy index's 0.79 fall.
The consumer staples index's dropped 0.4 percent drop, weighed down by a 3 percent drop in Wal-Mart.
Nordstrom slumped 10.5 percent to $40.47 after its weak report, while J.C. Penney was little changed as it maintained its full-year sales forecast.
Apple was up 0.5 percent a day after hitting a two-year low. Nvidia surged 11.4 percent to $40.05 after it forecast better-than-expected revenue for the current quarter.
Declining issues outnumbered advancing ones on the NYSE by 1,619 to 1,285. On the Nasdaq, 1,408 issues rose and 1,259 fell.
The S&P 500 index showed 15 new 52-week highs and 8 new lows, while the Nasdaq recorded 23 new highs and 54 new lows. (Reporting by Tanya Agrawal and Yashaswini Swamynathan; Editing by Ted Kerr and Savio D'Souza)