Sun, Jan 05, 2003 - Page 10 News List

Retail companies lead shares lower in US

HANGOVER After Home Depot, one of America's top retailers said it expected earning to fall, shares of other in the sector declined, bringing share markets down

BLOOMBERG , NEW YORK

Traders Randolph Scheffel, center, and Martin J. Burke, bottom, signal orders at the close of trading in the Standard & Poor's 500 Futures pit at the Chicago Mercantile Exchange Thursday. The first day of trading for the new year started strong as stocks posted their highest gains in two months.

PHOTO: AP PHOTO

US stocks fell as Home Depot Inc reduced its estimates for revenue and profit, sending shares of retailers lower.

The biggest home-improvement chain and Wal-Mart Stores Inc accounted for the entire decline in the Dow Jones Industrial Average. Lowe's Cos, Home Depot's largest rival, also tumbled.

Lower forecasts by Home Depot "could spell trouble for retailers," said Mark Roach, who helps manage US$3.5 billion at Vaughan, Nelson, Scarborough & McCullough LP in Houston.

"This is clearly not the direction you want go in."

The Standard & Poor's 500 Index fell 2.95, or 0.3 percent, to 906.26 at 3:40pm in New York. The Dow slid 17.22, or 0.2 percent, to 8,591.93. The NASDAQ Composite Index lost 1.73, or 0.1 percent, to 1,383.98.

In the four-day trading week, the S&P 500 and Dow have added about 3.5 percent. For both it would be the biggest weekly advance since mid-October. The NASDAQ has climbed 2.6 percent.

Gains by healthcare shares limited losses as Forest Laboratories Inc said quarterly earnings exceeded forecasts.

Stocks also got a boost from government figures showing construction spending rose more than expected in November.

Spending increased for a third month, advancing 0.3 percent to US$843.2 billion after gaining a revised 1 percent in October.

Benchmark indexes yesterday surged more than 3 percent, their biggest rally since Oct. 15, after factory orders and production rebounded more than expected in December.

"As we look at the economy, we are starting to see signs of life," William Batcheller, who helps manage about US$28 billion for National City Corp in Cleveland, told Bloomberg Television.

With US$2.3 trillion, about one-quarter the value of US stocks, in money-market mutual funds, "there is an awful lot of liquidity on the sidelines just waiting for the opportunity to invest," he said.

Major markets

* The Standard & Poor's 500 Index fell 2.95, or 0.3 percent, to 906.26.

* The Dow slid 17.22, or 0.2 percent, to 8,591.93.

* The NASDAQ Composite Index lost 1.73, or 0.1 percent, to 1,383.98.


Declining and advancing stocks were about even on the New York Stock Exchange. Trading on the Big Board totaled 978 million shares, 6 percent less than yesterday.

Wal-Mart, whose December sales lagged forecasts, declined US$1.64 to US$49.96. Target Corp, the second-biggest discount retailer, slid US$1.09 to US$30.02.

Circuit City Stores Inc, which last month reported a wider-than-expected loss in the third quarter, slid 32 cents to US$7.10. Best Buy Co, another electronics retailer, lost US$1.14 to US$23.82.

Automakers declined as they reported no-interest loans and discounts lifted December sales. Ford Motor Co fell US$0.23 to US$9.71. General Motors Corp slipped US$0.42 to US$38.53.

The American depositary receipts of DaimlerChrysler AG, the world's fifth-biggest carmaker, slid US$0.78 to US$32.19.

Cadence Design Systems Inc slid US$2.44 to US$9.22. The maker of software used to design semiconductors said excluding certain costs, fourth-quarter profit was US$0.02 to US$0.04 a share. The average estimate of analysts surveyed by First Call was US$0.14.

Guidant Corp declined US$1.60 to US$30. The medical device maker said it expects to abandon a US$3 billion purchase of closely held Cook Group Inc because the companies' experimental heart product failed to meet the main goal of a study.

Guidant is now as many as three years behind Johnson & Johnson and Boston Scientific Corp. in its bid to sell a drug-coated stent, analysts said. Johnson & Johnson rose US$1.36 to US$56.69. Boston Scientific added US$0.68 to US$43.67.

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