Concerns over global economic weakness conspired to pull stocks lower this morning, while more disappointing earnings were delivered by retailers.
The S&P 500 fell 5 points to 1,980, the Dow Jones Industrial average slipped 43 points to 16,855 and the Nasdaq gave up 10 points to 4,693. The S&P Retail ETF is falling by 21 cents to $44.00
Stage Stores Inc. plunged by almost 20 percent to $7.20 in early trading after missing earnings estimates for the fourth quarter. Low oil prices, a devalued peso and the warm winter caused Stage Stores to deliver adjusted earnings of 91 cents per share in earnings, missing the FactSet estimate of $1.06. Sales decreased 4.2 percent to $502.6 million, which was basically inline with estimates, but lower than last year’s $524.9 million. The company said it was remaining cautious in the current environment.
Burlington Stores Inc. was also having a bad morning as its stock fell over 3 percent to $54.76 after the off-price retailer reported fourth-quarter earnings. Burlington Stores beat analyst estimates on the backs of share repurchases. Adjusted net income for the fiscal fourth quarter rose 0.3 percent to $109.3 million, or $1.49 cents per diluted share, up from $1.43 cents a year earlier and beating the FactSet estimate of $1.46. On a positive note, net sales for the three months ended Jan. 31 increased 3.7 percent to $1.54 billion from $1.45 billion a year earlier and also topped the FactSet estimate of $1.540. Outstanding shares, though, fell from 76.3 million last year to 73.4 million for the same period.
February same-store sales figures were released for a shrinking group of retailers that continue to report monthly. L Brands Inc.’s sales rose 6 percent over last year for the month, while Cato Corp. fell 10 percent. The Buckle Inc.’s comparable sales fell 2.7 percent over last year.
Elsewhere in the market, crude oil traded lower to $34 a barrel. Groupon fell by over 3 percent to $4.48 after IBM filed a lawsuit against the flash sale coupon company and Costco Wholesale Corp. declined by over 2 percent to $148 after reporting a disappointing quarter.
In economic news, productivity fell at an annual rate of 2.2 percent in the fourth quarter, while labor costs rose 3.3 percent. Weekly jobless claims increased to 278,000, for a gain of 6,000 from the previous week. Investors are expecting a steady nonfarm payroll report for February on Friday.
Asian markets ended the day on a high note even though China’s purchasing managers’ index reports showed a weak economy. The European indices have been trading mostly flat. Euro zone January retail sales improved month-over-month, but were lower than last year. Consumer companies out of France have been trading in negative territory, pulling the French CAC down by 0.3 percent.