Stocks ended a streak today of four weeks in which the major indexes moved higher. The major indices were essentially flat on the day but ended the week in the red for the first time since mid- April. The loss is due, perhaps in part, to fears that the Federal Reserve Bank may start tapering off its quantitative easing later this year. A number of S&P 500 companies also came out with disappointing earnings which seemed to throw a damper on the overall market.
Abercrombie and Fitch (ANF) closed down more than 8% after releasing a dismal earnings report this morning. The clothing company says it lost 9-cents a share, less than the 25-cents it lost a year ago, but still almost twice as much as estimates. Revenues also missed by more than $100-million dollars. Same store sales are down 15% from a year ago. The chain says that's largely because of inventory shortages. Abercrombie is now cutting its annual forecast by about 10%.
Abercrombie competitor, Gap (GPS), saw its shares drift as much as 5% lower throughout the trading day after releasing its earnings. The company beat estimates on both the top and bottom lines posting 71-cents a share on $3.73 billion in revenue. However, it has lowered estimates for the rest of the year. By the way, the quarter was also a marked improvement over the same period last year when earnings were 47-cents a share. The company was helped by a rise in same-store sales at its namesake Gap stores as well as Old Navy stores. Growth in Asia was also strong. Shares of the Gap hit a new 52-week high on Tuesday.
Sears (SHLD) ended the day more than 13% lower after disappointing with its quarterly report. The retailer reported a whopping loss of $2.63 a share after yesterday's closing bell. That's more than $2 wider than expected. Sears cited cooler weather. The company is trying to reverse a sales slide that began back in 2005 when it merged with K-Mart. At this point the Sears says it may sell its service contracts unit for the cash. Prior to today, the stock had been on a steady climb this year, up an impressive 40%.Read More »from Stocks End Streak of Weekly Gains; Abercrombie and Sears Tank on Earnings