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Thursday, Feb 2, 2023

Stocks Drop on Weak Retail Sales

Stocks fell on Thursday as investors reacted to major retailers failing to meet July sales expectations, while a rise in oil prices revived worries about oil’s impact on consumer spending.

The Dow Jones Industrial Average fell 87.49, or 0.8 percent, to 10,610.10. The Standard & Poor’s 500 Index dropped 9.18, or 0.7 percent, to 1,235.86. The Nasdaq Composite Index lost 25.49, or 1.2 percent, to 2,191.32.

Top U.S. retailers ranging from Gap Inc. to Nordstrom Inc. posted disappointing July sales as a heat wave curbed demand for fall back-to-school fashions. Nearly 60 percent of the July sales reports from the chains came in below market forecasts. Wal-Mart Stores Inc. was among the few retailers whose sales beat expectations, while teen-oriented stores posted hit-or-miss results, with those showing the “right” fashions reporting large July sales gains.

Oil prices rose as traders remained wary over possible supply woes due to refinery shutdowns, and forecasters predicted a busy hurricane season that could affect Gulf of Mexico output. Light sweet crude for September delivery rose 52 cents to settle at $61.38 a barrel on the New York Mercantile Exchange.

Among local movers, shares of DirecTV Group Inc. rose 2.7 percent to $15.83 after the El Segundo-based satellite television operator reported net income of $161.5 million (12 cents per diluted share) for the second quarter ended June 30. Analysts had expected earnings of 4 cents a share.

On the down side, shares of Global ePoint, Inc. fell 11.5 percent to $6.26 after the City of Industry-based digital video surveillance systems manufacturer said it had reached an impasse in its negotiations to acquire Astrophysics, Inc. The company said it is currently uncertain whether it will be able to reach a definitive agreement with Astrophysics.

Entravision Communications Corp. dipped 4.7 percent to $8.21 after the Santa Monica-based Spanish-language media company’s stock rating was downgraded to “market perform” from “market outperform” by analyst Kit Spring at Stifel Nicolaus.

And Guess Inc. fell 3.3 percent to $23.06 after the L.A.-based apparel company said its same-store sales rose 5.6 percent in July, ahead of analysts’ estimates of 4.1 percent but below year-ago gains. Total sales for the month rose 16.6 percent year-over-year to $45.3 million from $38.8 million.


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