Stock market today: Dow ends lower on rout in retailers, rumble in regional banks
Investing.com — The Dow closed lower Tuesday under pressure from regional banks and a tumble in retailers following disappointing quarterly results from Macy’s and Dick’s Sporting Goods.
The Dow Jones Industrial Average fell 0.5%, 175 points, Nasdaq was flat, and the S&P 500 fell 0.3%.
Retail stocks fell more than 2%, pressured by a tumble in Macy’s and Dick’s Sporting Goods as the duo’s outlook rattled investor sentiment.
Macy’s Inc (NYSE:M) fell more than 14% after the department store said it was taking a “cautious approach on the consumer,” following a faster-than-expected rise in customer credit-card delinquencies. The somber outlook offset quarterly results that beat on both the top and bottom lines.
Dick’s Sporting Goods Inc (NYSE:DKS), meanwhile, cut its guidance on the full-year profit after reporting weaker-than-expected quarterly results as inventory shrinkage, a loss in inventory not due to sales, weighed on margins. Its shares fell more than 24%.
“The larger disappointment was in gross margins at 34.4% vs. consensus 36.3%, with the company noting the shortfall was due in large part to elevated inventory shrink,” Wedbush said in a note.
Lowe’s Companies Inc (NYSE:LOW), however, bucked the trend to rise almost 4% after it maintained its annual guidance and reported better-than-expected quarterly results.
Regional banks including Regions Financial Corporation (NYSE:RF), KeyCorp (NYSE:KEY), and Zions Bancorporation (NASDAQ:ZION) fell sharply after credit ratings agency S&P Global downgraded its credit ratings on several regional banks, souring investor sentiment on the sector.
The dent in creditworthiness will make it more expensive for banks to borrow money at a time when strengthening their balance sheets is
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