Benchmarks ended lower on Tuesday as investors booked profits on a day devoid of major economic developments. Rise in US wholesale inventories and job openings in January provided little excitement to the investors. On top of that, a fall in small business sentiment somewhat damaged the mood. In the retail segment, the deal between Jos A Bank Clothier and Mens Wearhouse failed to give a positive direction to the markets.
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The Dow Jones Industrial Average (:DJI) plunged 0.4% to close Tuesday’s trading session at 16,351.25. The Standard & Poor (S&P 500) fell 0.5% to finish at 1,863.67. The tech-laden Nasdaq Composite Index declined 0.6% to 4,307.19. The fear-gauge CBOE Volatility Index (:VIX) increased 4.2% to settle at 14.80. Total volume on the New York Stock Exchange was 3.4 billion shares. Advancing stocks were outnumbered by declining stocks on the NYSE. For 31% stocks that advanced, 65% declined.
Tuesday’s economic data had little impact on the markets. The U.S. Department of Commerce announced that the US wholesale inventories rose 0.6% in January 2014 after it fell 0.1% in December 2013. This rise in wholesale inventories in January was more than the consensus estimate of a rise of 0.4%.
The U.S. Department of Labor reported job openings at US workplaces rose to 3.97 million in January from 3.91 million in December. However, this rise in job openings was less than the analysts’ expectations of a rise of 4.03 million.
Separately, the National Federation of International Business reported that the small-business sentiment dropped 2.7 points to 91.4 after six of its ten components slumped.
On the earnings front, American Eagle Outfitters, Inc. (NYSE:AEO) shares tumbled 7.8% after reporting fourth straight quarter of earnings and sales decline. The teen apparel retailer’s earnings slipped 51% annually to 27 cents a share in the last quarter. Its yearly sales fell 7% to $1.04 billion.
Urban Outfitters Inc. (NASDAQ:URBN) took a beating as well and its shares fell 4.3%. The company’s 5.7% sales increase to $905.9 million during the quarter ended Jan 31 fell short of the Zacks Consensus Estimate of $911 million.
On the mergers and acquisition front, shares of Jos. A Bank Clothiers Inc. (NASDAQ:JOSB) and The Men's Wearhouse, Inc. (NYSE:MW) rallied 3.9% and 4.7%, respectively, after Men’s Wearhouse agreed to acquire Jos. A Bank Clothiers for about $1.8 billion.
Separately, General Motors Company (NYSE:GM) shares fell 5.2% on reports that Federal prosecutors in New York are probing if the automaker failed to disclose issues in some vehicles. The problem had resulted in 13 deaths.
All the 10 sectors of the S&P 500 ended in the red. The Energy Select Sector SPDR (XLE) dropped the most as the sector fell 1.1%. Top five holdings from the sector such as Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), Schlumberger Limited (NYSE:SLB), Occidental Petroleum Corporation (NYSE:OXY) and Pioneer Natural Resources Co. (NYSE:PXD) plunged 1.6%, 1.2%, 0.9%, 0.8% and 3.3%, respectively.
The Materials sector closely followed the Energy sector. The Materials Select Sector SPDR (XLB) decreased 1%. Key stocks from the sector such as E. I. du Pont de Nemours and Company (NYSE:DD), The Dow Chemical Company (NYSE:DOW), Monsanto Company (NYSE:MON) LyondellBasell Industries NV (NYSE:LYB) and Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) went down 1.9%, 1.1%, 1.5%, 0.7% and 2.1%, respectively.
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Read the analyst report on SLB
Read the analyst report on OXY
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Read the analyst report on DOW
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Read the analyst report on FCX
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