U.S. stocks are following the downward trajectory started in Europe, where the major indices have declined as a result of the bank stress tests.
European bank stocks have plunged following a lack of confidence in the stress tests and some Italian bank stocks were even halted in trading.
This put a damper on the U.S. stock market, with the Dow Jones Industrial Average dropping for the seventh day in a row, losing 26 points to trade at 18,378. The S&P 500 is dropping 3 points to 2,167 and the Nasdaq is down 10 points to 5,173. The S&P Retail ETF is sliding by 19 cents to $44.73.
Also contributing to today’s downbeat opening, crude oil slipped below $40 a barrel. Although it crept back over $40, investors are getting worried it will return to $30 a barrel.
The Procter & Gamble Co. is rising by 48 cents to $86.90 this morning after the consumer brand giant beat earnings estimates for its fiscal fourth quarter, even as its beauty sales declined. P&G recorded sales of $16.1 billion, which topped the FactSet estimate for $15.8 billion. The adjusted earnings of 79 cents a share also bested the FactSet forecast for 74 cents a share. Net income rose to $1.95 billion over last year’s $521 million, but last year P&G took a charge for its Venezuelan business. The company stepped up marketing and cut costs as it attempts to simplify its product assortment.
Avon Products Inc. stock is up over 15 percent to $4.79 in early trading after the firm beat analysts’ forecasts for second-quarter earnings. Avon recorded earnings of 7 cents a share, much higher than the FactSet forecast for 2 cents a share. Revenue dropped 8 percent year-over-year to $1.42 billion, but this was better than the FactSet estimate for sales of $1.41 billion. Avon said it expects to cut costs by $70 million in 2016.
Steve Madden Ltd. lowered its sales outlook for the year as it met analysts’ expectations on the earnings, but was shy of hitting the estimates for sales for the second quarter. The stock fell over 4 percent to $34.21. The fashion shoe company reported inline earnings of 42 cents a share and revenue of $325 million, missing the FactSet estimate of $330 million. Same-store sales increased 5.4 percent, but gross margins decreased. Chief executive officer Ed Rosenfeld said the company was experiencing softer-than-anticipated private label footwear trends, causing it to lower the 2016 sales outlook to flat or up 1 percent.
Coach Inc. sold its interest in 10 Hudson Yards for $707 million, net of the $77 million due to the developer. The transaction costs of $26 million left Coach with a gain of $30 million, which will be amortized over 20 years. Coach also entered into a 20-year lease agreement for its new headquarters. Coach stock fell by over 1 percent to $42.77 on the news.