U.S. Stocks Down As Chain-store Sales Fall, FedEx Cuts Forecast
NEW YORK (MarketWatch) - U.S. stocks fell at Tuesday's start after Texas Instruments Inc. and FedEx Corp. cut their earnings forecasts and a measure of chain-store sales showed a decline last week, further illustrating the weakened economy.
The Dow Jones Industrial Average fell 89.13 points to 8,845.05.
The S&P 500 shed 7.52 points to 902.18 and the Nasdaq Composite declined 9.07 points to 1,562.67.
The financial sector fell the most among the S&P's 10 industry groups, with shares of ProLogis off 11.3% and T. Rowe Price Group Inc. off 7.7%.
Volume on the New York Stock Exchange hit 113 million shares, and decliners topped advancers almost 2 to 1. On the Nasdaq, 71 million shares traded hands, and decliners outpaced advancing stocks by a less than 2-to-1 margin.
Ahead of the opening bell, the International Council of Shopping Centers and Goldman Sachs reported chain-store sales declined 0.8% last week from the prior week, and gained only 0.4% from the year-ago period.
"The tough economic and retail environment, which continued into early December, is likely to dominate the full month's sales performance as well," said Michael Niemira, ICSC's chief economist.
In focus on the economic front Tuesday are the latest figures on October pending home sales.
The dollar strengthened against most currencies but slipped against the yen. The euro fell 0.9% to $1.2815, while the dollar was down 0.3% against the Japanese currency at 92.62 yen.
Oil prices also remained fairly steady in early futures trade on the New York Mercantile Exchange. Light crude for January delivery gained 36 cents to $44.07 a barrel.
The auto industry is set to remain in focus after Democratic leaders sent the White House a $15 billion bill to rescue the sector.
The proposal, which reportedly could give the government an ownership stake in the industry, requires long-term restructuring plans and other concessions from the Big Three in exchange for a federal lifeline.
The latest round of profit warnings and job cuts rolled on, with TI and FedEx among the companies cutting their forecasts late Monday.
Also in the chip sector, National Semiconductor moved to scale back production and said sales in the current quarter would likely be down around 30%.
Sony Corp. said Tuesday it plans to cut 8,000, or 5%, of the jobs in its electronics division, as well as close manufacturing sites worldwide in an effort to save around $1.1 billion.
Also Tuesday, AutoZone Inc. reported fiscal first-quarter earnings of $2.23 a share compared to $2.02 a share a year earlier. Analysts had been expecting earnings of $2.20 a share.
In international markets, Japan's Nikkei 225 rose 0.8% and the U.K.'s FTSE 100 index added 1.5%.
U.S. markets climbed Monday, with the Dow Jones Industrial Average closing at its highest level in a month, as investors cheered President-elect Barack Obama's pledge on infrastructure investment and a likely deal for the auto industry.
By Kate Gibson