U.S. stocks traded mostly lower Wednesday, weighed by some disappointing earnings, while oil turned higher after weekly EIA inventory data unexpectedly showed a decline in crude stocks.
WTI reversed earlier declines to trade more than 2 percent higher after weekly crude inventories showed a decline of 3.4 million barrels, versus an expectation of a slight build, according to Dow Jones.
The major averages pared losses, with the Nasdaq composite trying for gains and the S&P 500 mildly lower.
“I don’t think today’s sell-off is a case of everyone running for the doors. You just have one really big stock that is weighing on the averages and a couple of smaller ones,” said JJ Kinahan, chief strategist at TD Ameritrade.
The Dow Jones industrial average traded more than 100 points lower, with Walt Disney contributing the most to declines. Declines in Wal-Mart, Home Depot and Nike also weighed on the index.
Consumer discretionary held more than 1 percent lower to lead S&P 500 decliners, while tech led advancers.
Shares of Disney briefly fell more than 5.5 percent in morning trade. Macy’s traded more than 11 percent lower and Fossil (FOSL) briefly fell more than 30 percent in morning trade after reporting earnings. The SPDR S&P Retail ETF (XRT) (NYSE Arca: XRT) traded more than 3 percent lower.
Dow component Disney (DIS) reported its first earnings miss in five years , while revenue was also below forecasts. Factors affecting results included decline in ESPN ad revenue due to the timing of college football playoff games and higher pre-opening expenses at Shanghai Disney Resort, the company said.
Studio revenue for the quarter increased 22 percent to $2.1 billion, powered by the box-office success of “Star Wars: The Force Awakens” and animated movie “Zootopia,” Reuters said.
Macy’s (NYSE:M) lowered its full-year forecast, with CEO Terry J. Lundgren noting “continued weakness” in consumer spending in the press release. Quarterly earnings topped expectations, while revenue came in below estimates.
“I think in some sense more of a concern might be Macy’s,” Kinahan said. “It just continues to give the conundrum about what’s going to happen to these brick and mortar stores going forward. They’re just having a tough time and you’re seeing it in earnings.”
He’s watching Nordstrom earnings, due after the close Thursday, and April retail sales, expected Friday morning.
In other corporate news, Staples (SPLS) and Office Depot (ODP) ended their planned merger deal after a judge sided with the Federal Trade Commission in its effort to block the deal on competitive grounds. The companies do not plan to appeal the decision.
Shares of Office Depot fell more than 37 percent in morning trade, tracking for its worst day since its IPO in 1988. Staples traded more than 18 percent lower.
U.S. crude oil futures traded more than 1.5 percent higher near $45.50 a barrel as of 10:44 a.m. ET. Brent rose more than 2 percent to around $46.60 a barrel.
American Petroleum Institute data late Tuesday showed crude inventories rose by 3.45 million barrels in the week to May 6 to 543.1 million, compared with analysts’ expectations for an increase of 714,000 barrels, Reuters said. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 1.46 million barrels, API said in the newswire report.
The U.S. dollar index traded 0.4 percent lower, following its first six-day win streak since April last year. The euro was near $1.143 and the yen around 108.5 yen against the greenback in morning trade ET.
Gold traded about 1 percent higher around $1,277 an ounce.
Treasury yields were mostly lower, with the 2-year yield flat around 0.73 percent and the 10-year yield near 1.75 percent. The Treasury is scheduled to hold a 10-year note auction in the afternoon.
European stocks were more than half a percent lower in mid-morning trade ET. Asian stocks were mixed, with the Nikkei 225 and Shanghai composite mildly higher and the Hang Seng down 0.9 percent.
U.S. stocks closed more than 1 percent higher Tuesday, with the Dow Jones industrial average posting its best day since March 11.
In mid-morning trade, the Dow Jones industrial average (Dow Jones Global Indexes: .DJI) declined 100 points, or 0.56 percent, to 17,827, with Walt Disney leading decliners and Microsoft (MSFT) the top advancer.
The S&P 500 (^GSPC) declined 8 points, or 0.38 percent, to 2,076, with consumer discretionary leading nine sectors lower and information technology the only gainer.
The Nasdaq (^IXIC) composite fell 10 points, or 0.21 percent, to 4,799.
The CBOE Volatility Index (VIX) (^VIX), widely considered the best gauge of fear in the market, traded near 13.9.
Roughly two stocks declined for every advancer on the New York Stock Exchange, with an exchange volume of 165 million and a composite volume of 688 million in mid-morning trade.
U.S. crude oil futures for June delivery fell 45 cents to $44.21 a barrel on the New York Mercantile Exchange.
Gold futures for June delivery rose $13.30 to $1,278.10 an ounce as of 10:23 a.m. ET.
—CNBC’s Peter Schacknow and Reuters contributed to this report.
On tap this week:
Earnings: CA, NetEase
1 p.m. $23 billion 10-year note auction
2 p.m. Federal budget
Earnings: Dr. Reddy’s Labs, Kohl’s, Ralph Lauren, Nordstrom, Nvidia, Symantec, Shake Shack
8:30 a.m. Initial claims; import prices
11 a.m. Cleveland Fed President Loretta Mester
11:45 a.m. Boston Fed President Eric Rosengren
1 p.m. $15 billion 30-year bond auction
2:15 p.m. Kansas City Fed President Esther George
Earnings: Honda Motor, Brookfield Asset Mgmt., JC Penney
8:30 a.m. Retail sales
8:30 a.m. PPI
10 a.m. Consumer sentiment
10 a.m. Business inventories
6:25 p.m. San Francisco Fed’s Williams
*Planner subject to change.
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