Stocks are down sharply after a quiet start to the week from Asia and Europe. Both the Chinese and Japanese markets closed slightly higher. Europe’s markets are trading slightly higher even as reports are coming from Europe that the German parliament is opposing German Chancellor Angela Merkel’s package for Greece.
Stocks were flat in pre-market trading, but then plunged after the Empire Fed Manufacturing Survey unexpectedly fell to a negative reading of 14.92 missing the estimate of 4.50. New orders came crashing down, employment was lower and inventories dropped. Some market watchers believe that New York’s data will signal what is happening nationwide. There is also a belief that the Fed may not want to hike rates in September if this report is an indication of what is happening nationally.
The Estée Lauder Cosmetics Inc. stock is trading down 1.4 percent to $87.55 after the beauty company reported falling sales for the fourth quarter. Sales in the skin-care division fell 16 percent to $1.01 billion due to less demand for skin products from heritage brands Clinque and Estée Lauder. Since the division contributes roughly 40 percent of total sales, the drop in demand hurt. The cosmetics company said it was also hurt by the strong dollar.
QVC owner Liberty Interactive looks to be buying online retailer Zulily in a cash-and-stock deal valued at $2.3 billion. It will pay roughly $18.75 a share or about a 49 percent premium to Friday’s close of $12.57. That’s less than the $22 the company priced its initial public offering in November of 2013 and on that day the stock closed at $37.52. Zulily grew as a company, adding employees and building big fulfillment centers, but Wall Street investors became concerned about the decline in sales and began selling off the stock. Now that Liberty sees some value, the stock is soaring 48 percent in early trading to $18.62.
Target Corp. is promoting chief financial officer John Mulligan to the newly created role of chief operating officer and named Express Scripts cfo Cathy Smith as his replacement. The stock is down slightly 0.44 percent this morning to $78.44.
Jeff Bezos, chief executive officer of Amazon.com, came out swinging on Monday morning after a scathing New York Times story about the workplace conditions of the online retailer. Former employees told tales of extremely long hours and a lack of sympathy for workers that became ill or have children. Bezos basically said he was unaware of any employee complaints or that the company had a cut-throat environment.
Urban Outfitters Inc. is trading down slightly 1.61 percent to $31.80 ahead of its earnings report for the second quarter. The retailer will deliver its results after the market close, but as many retailers have delivered disappointing news, it looks like investors don’t have high hopes for Urban.