Stocks

The Dow Lost 102 Points Because Retail Earnings Were a Wipeout

Stocks were mixed on Tuesday, weighed down by disappointing earnings from Home Depot and Kohl’s. Macy’s, Bed Bath & Beyond, and Nordstrom also saw shares tumble.

Stocks were mixed on Tuesday, weighed down by disappointing earnings from Home Depot and Kohl’s. Macy’s, Bed Bath & Beyond, and Nordstrom also saw shares tumble.

Retail Rout. Stocks were mixed on Tuesday, weighed down by disappointing earnings from retailers such as Home Depot (ticker: HD) and Kohl’s (KSS). Oil prices settled at the lowest level this month. Turmoil in Hong Kong continues, but Alibaba Group Holding’s (BABA) Hong Kong-listed shares have seen strong demand despite the disruption. In today’s After the Bell, we...

Early Holiday Gloom

Stocks continued to trade flat on Tuesday. The Dow Jones Industrial Average fell 102.20 points, or 0.36%, to close at 27,934.02. The S&P 500 dropped 1.85 points, or 0.06%, to finish at 3120.18, while the Nasdaq Composite added 20.72 points, or 0.24%, to close at 8570.66.

Retail stocks were hammered today. Home Depot stock slumped 5.4% after the home-improvement company cut expectations for sales growth. Kohl’s stock dropped 19.5%—in the worst one-day drop since January 2017—after the department store lowered its profit guidance for the year.

Other retailers displayed weakness, too. Macy’s stock (M) tumbled 11%, Bed Bath & Beyond stock (BBBY) slumped 7%, Nordstrom stock (JWN) dropped 6.3%, and Gap stock (GPS) fell 3.1%. Despite the coming Thanksgiving shopping season, investors are concerned that consumer spending, which has been lifting the economy for most of the year despite weakness in manufacturing, might finally start to wane. The one exception is discount retailer TJX (TJX), whose stock rose 2.7% on Tuesday after reporting strong sales growth.

The Organization of the Petroleum Exporting Countries is slated to meet for a two-day gathering beginning early December and OPEC’s de facto leader Saudi Arabia is reportedly pushing other members and allies for deeper production cuts to stabilize weak oil prices ahead of a massive initial public offering of Saudi’s state-owned Aramco. Currently, OPEC and allies have an agreement in place that pledges for a combined output cut of 1.2 million barrels a day, which will expire next March.

However, Reuters reported today that Russia—one of the major oil exporters outside of OPEC—is unlikely to agree to deepen production cuts at the coming meeting. The news has triggered a sharp drop in oil prices on Tuesday. Brent crude futures for January delivery dropped 2.5% to settle at $60.91 per barrel, and West Texas Intermediate crude futures fell 3.3% to settle at $55.21 per barrel.

Investors are also watching the U.S. Senate, which is expected to vote on a bill later today that could potentially put Hong Kong’s special trading treatment by the U.S. under heightened scrutiny. The legislation would require the Secretary of State to certify Hong Kong’s sufficient autonomy at least once a year.

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Despite the political unrest in Hong Kong, Chinese e-commerce giant Alibaba kicked off the campaign for its second stock listing in the city last week. The company said it expects to set the price for the Hong Kong shares on Nov. 20 based on Tuesday’s closing price of its American depositary shares on the New York Stock Exchange.

The Wall Street Journal today reported that Alibaba stopped taking orders from U.S. institutional investors at noon on Tuesday ET, earlier than the previously planned cutoff at 4 p.m. The offering was oversubscribed, but some Hong Kong shares were set aside for individual investors, who are assured to pay a maximum of $188 Hong Kong dollars, or about US$24, each.

Write to Evie Liu at evie.liu@barrons.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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