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.
PHOTO: AP PHOTO
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.
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.
Forest Laboratories climbed US$5.34 to US$105.34. The drugmaker said fiscal third-quarter profit almost doubled to at least US$0.89 a share, beating the US$0.77-a-share average estimate of analysts surveyed by Thomson First Call.
Eastman Kodak Co rallied US$1.37 to US$37.21, adding the most to the Dow. Deutsche Bank Securities Inc analyst Peter Ausnit raised the stock to "buy" from "hold," citing expectations the world's biggest maker of film will give an "upbeat" forecast for this year when it reports fourth-quarter earnings on Jan. 22.
Continental Airlines Inc rose US$0.57 to US$8.19. The fifth-largest US airline said revenue for every seat carried one mile last month was as much as 11 percent higher than a year earlier.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure