Stocks weaken on consumer confidence: Reuters/Michigan
US stocks were in a state of flux for most of the New York trade before falling broadly on consumer confidence. Personal consumer confidence in economic activity is weaker in August than it was previously, a report by Reuters and the University of Michigan showed. The Consumer Sentiment Index declined to 80.0 for August, more than 5 points lower than the previous month and considerably lower than the expected reading of 85.5. The lower reading suggests households are less willing to spend money on goods and services than they were a month ago.
Earlier in the week Wal-Mart Stores Inc. hinted at economic struggle following weaker-than-expected profit margins for the quarter ending July 26. A decline in spending among low-income consumers was largely blamed for Wal-Mart’s lackluster earnings, suggesting households are less likely to fork out cash on non-essentials. Wal-Mart shares tumbled 2.6 percent Thursday, as the world’s largest retailer slashed profit forecasts for the year ending January 2014. Shares continued lower Friday, declining 0.4 percent to $74.11.
In other news, Nordstrom Inc. declined more than 4.8 percent after slashing its annual profit forecast. The fashion retailer revised forecasts even after second quarter EPS exceeded expectations. At the closing bell Nordstrom was trading at $56.43. Alcoa Inc. declined half a percent to $8.12 a share after its rating was downgraded by Merrill Lynch.
The benchmark gauges all fell on another day of dismal trading. The Standard and Poor’s 500 registered its biggest weekly drop since November, as the combination of weak housing starts and declining consumer confidence clouded investors’ judgment regarding the Federal Reserve’s next course of action. The S&P 500 declined more than 0.3 percent to 1,655.83. The index declined more than 1.7 percent this week, mostly on speculation about Federal Reserve interest rates. The Dow Jones Industrial Average recorded another dismal outing, losing 0.2 percent to 15,081.50.
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