Thursday, May 15 15:41:39
Wall Street extended its losses into a second day today as weaker-than-expected earnings from Wal-Mart and a selloff in momentum stocks overshadowed positive economic reports.
Wal-Mart Stores Inc shares fell 2 percent to $77.12 after the world's largest retailer forecast second-quarter profit below analysts' estimates. The company also reported its smallest growth in quarterly sales in nearly five years.
Kohl's Corp shares also fell 2 percent to $53 after the specialty departmental retailer reported weaker-than-expected first-quarter earnings. The S and P retail sector index was off 1.6 percent.
Momentum stocks were among the day's biggest decliners. The Nasdaq Biotechnology Index fell 1.8 percent and the Global X Social Media Index lost 1.2 percent.
Among individual stocks, Netflix fell 2.7 percent to $342.27 and Facebook Inc was off 1.9 percent at $58.17.
"We seem to be stuck in this trend among momentum stocks that is moving the entire market," said Rick Meckler, president of hedge fund LibertyView Capital Management in Jersey City, New Jersey.
"It's a tug of war between those who think they have fallen far enough and are interested in picking up and those who still think the trend is to go lower. It's the latter today."
Small cap stocks continued their selloff with the Russell 2000 index falling 1.8 percent. The index is now down 10.4 percent from its closing high on March 4. A double-digit decline is viewed by some traders as an official correction.
In macroeconomic news, new applications for U.S. unemployment benefits hit a seven-year low last week while consumer prices recorded their largest increase in 10 months in April, pointing to a firming economy.
But U.S. industrial output fell at its fastest rate in more than 1-1/2 years in April as factory production slumped, tempering hopes for a big jump in economic growth after a winter slowdown.
The Dow Jones industrial average fell 140.28 points or 0.84 percent, to 16,473.69, the S and P 500 lost 18.47 points or 0.98 percent, to 1,870.06 and the Nasdaq Composite dropped 53.002 points or 1.29 percent, to 4,047.625.