Retailers lead a broad decline in stocks as Macy’s plunges – U.S. News & World Report

This post was originally published on this site

By MARLEY JAY, AP Markets Writer

NEW YORK (AP) — U.S. stock indexes are sliding Wednesday as Macy’s leads a rout in retail stocks. The department store slashed its profit forecast and reported a steep drop in earnings. Office supply companies Office Depot and Staples are tumbling after a judge blocked their plans to merge. Stocks are coming off their biggest gain in two months.

KEEPING SCORE: The Dow Jones industrial average sank 116 points, or 0.7 percent, to 17,812 as of 12:15 p.m. Eastern time. The Standard & Poor’s 500 index fell 8 points, or 0.4 percent, to 2,076. The Nasdaq composite index lost 13 points, or 0.3 percent, to 4,796.

THAT WASN’T EASY: Office Depot and Staples plunged after calling off their proposed merger. A federal judge ruled that competition for office supplies would be reduced if the largest office-supply chain combined with the second-largest, supporting the government’s effort to stop the $6.3 billion deal. Office Depot nosedived $2.34, or 38.4 percent, to $3.75 and Staples skidded $1.72, or 16.6 percent, to $8.64.

Online rival Amazon, which is trading at all-time highs, rose $12.60, or 1.8 percent, to $715.67.

AN EXTRA LIFE: Video game maker Electronic Arts’ quarterly profit and sales were far stronger than expected, and it gave strong guidance for its current fiscal year. The stock jumped $8.38, or 13 percent, to $72.92.

DISASTER ON 34TH STREET: Department store Macy’s fell to its lowest price in almost five years after it posted disappointing sales and said shoppers spent less on clothes and international tourists spent less. Macy’s also sharply reduced its annual profit forecast. The stock sank $4.93, or 13.3 percent, to $32.06. Retailers including Michael Kors, Nordstrom, Ralph Lauren and Kohl’s also took big losses.

OIL: Already trading at its highest price in six months, benchmark U.S. crude rose again after the government reported a surprise decline of 3.4 million barrels in supplies for last week. Analysts were expecting an increase. U.S. oil production also fell, and is down 6 percent compared to a year ago.

U.S. oil rose $1.30, or 2.9 percent, to $45.96 a barrel in New York. Brent crude, the benchmark for international oil prices, gained $1.56, or 3.4 percent, to $47.08.

Energy companies also traded higher. Chesapeake Energy rose 38 cents, or 8.8 percent, to $4.68 and Halliburton gained $1.16, or 3 percent, to $40.

NOT A DISNEY ENDING: Disney posted weaker-than-expected earnings and sales. Its parks and consumer products divisions didn’t do as well as analysts hoped, and the company said it’s discontinuing its Disney Infinity video game line because the changing market is too risky. Its stock lost $4.83, or 4.5 percent, to $101.77.

WATCH OUT: Watch and accessories maker Fossil Group disclosed disappointing sales and said conditions have gotten worse. It cut its projections for the year, and its stock dropped $$10.67, or 26.6 percent, to $29.43.

STAMPEDE: Pet food maker Blue Buffalo Pet Products advanced after it reported strong quarterly results and boosted its sales forecast for the year. The stock added $1.90, or 7.9 percent, to $25.78.

GETTING FRIED: Fast food chain Wendy’s raised its annual projections after reporting strong first-quarter results, but cautioned that a key sales measurement won’t meet its expectations in the second quarter. The stock gave up 79 cents, or 7 percent, to $10.40.

OVERSEAS: Germany’s DAX slid 0.7 percent and France’s CAC 40 was 0.5 percent lower. Britain’s FTSE 100 rose 0.1 percent. Japan’s Nikkei 225 edged up 0.1 percent, while South Korea’s Kospi fell 0.1 percent.

BONDS, CURRENCIES: Bond prices edged higher. The yield on the 10-year U.S. Treasury note fell to 1.74 percent from 1.76 percent. The dollar fell to 108.53 yen from 109.30 yen. The euro rose to $1.1437 from $1.1370.

___

AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at http://bigstory.ap.org/journalist/marley-jay

Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.