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S&P 500, Dow retreat from record levels as Home Depot, Kohl's weigh

Six of the 11 major S&P 500 sectors were lower, with the consumer discretionary index's 1% drop weighing the most.

Nov 19, 2019, 09.23 PM IST
The S&P 500 and the Dow Jones Industrial Average retreated after touching record highs on Tuesday, hit by dour forecasts from retailers Home Depot and Kohl's.

Shares of the largest U.S. home improvement chain fell 5.3% and were the top drag on the two main indexes after the company cut its 2019 sales forecast for the second time this year as its online push was not delivering as expected.

Also souring the mood was Kohl's Corp, which slumped 17.8% as the department store operator slashed its annual profit forecast after falling short of quarterly comparable sales and earnings estimates.

Six of the 11 major S&P 500 sectors were lower, with the consumer discretionary index's 1% drop weighing the most.

Other retail stocks also fell on the news, driving the S&P 500 retail index down 1.2%. Investors await reports from Lowe's Cos Inc, Target Corp and Nordstrom Inc among others this week.

"At the moment the consumer sentiment is still strong but that doesn't mean it is going to reflect in every retailer's earnings," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin.

The three main U.S. stock indexes had opened higher on continued optimism that Washington and Beijing would agree on a deal to end a damaging trade war.

"Markets have probably risen a little too far ... so it is no surprise that we are seeing some pause here," Frederick added.

Expectations of a trade deal as well as a largely better-than-expected third-quarter corporate earnings season has also fuelled a Wall Street rally over the past few weeks, with the S&P 500 setting new records almost every day.

At 10:30 a.m. ET the Dow Jones Industrial Average was down 64.44 points, or 0.23%, at 27,971.78, the S&P 500 was down 2.46 points, or 0.08%, at 3,119.57 and the Nasdaq Composite was up 11.13 points, or 0.13%, at 8,561.07.

Also on the agenda this week are minutes from the Federal Reserve's latest policy meeting, where it cut interest rates for the third time this year, and data on U.S. manufacturing and services sectors.

Among other stocks, AT&T Inc slipped 2.6% after MoffettNathanson downgraded the U.S. wireless carrier's stock to "sell" from "neutral".

However, shares of Broadcom Inc rose 3% after Morgan Stanley upgraded the chipmaker's stock to "overweight" from "equal-weight".

Declining issues outnumbered advancers for a 1.05-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.49-to-1 ratio on the Nasdaq.

The S&P index recorded 30 new 52-week highs and two new lows, while the Nasdaq recorded 66 new highs and 69 new lows.
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