Falling oil prices, a drop in new home sales and a poor U.S. manufacturing report conspired to motivate investors to sell stocks on worries of a first quarter contraction in the American economy.
The S&P 500 is down by 26 points to 1,895, the Dow Jones Industrial Average is dropping by 227 points to 16,204 and the Nasdaq is declining by 66 points to 4,436.
The S&P Retail ETF is down by 54 cents to $41.61 as a slew of retailers began reporting earnings. While some clearly did well, many are guiding future earnings to be flat or down.
Sequential Brands Group Inc. beat analyst estimates for fourth-quarter earnings and sales, causing the stock to pop over 20 percent to $6.89 in early trading. Sequential reported diluted earnings per share of 23 cents for the fourth quarter, which was better than the FactSet estimate of 17 cents a share. Sales came in at $31.4 million, also higher than the $29.7 million forecast by FactSet. Fourth quarter revenue increased 56 percent and full year revenue rose 111 percent. Sequential did report a net loss for the quarter of $5.7 million, mostly due to acquisition and restructuring costs.
The TJX Companies Inc. beat analyst’s estimates on earnings and sales for the fiscal fourth quarter. The stock is up 26 cents to $72.99 in early trading. TJX reported net income of $666 million, or 99 cents in earnings per diluted share, topping the FactSet estimate of 94 cents a share. The company delivered net sales of $9 billion, an 8 percent increase over last year and beating the FactSet estimate of $8.7 billion.
HSN Inc. stock is rising by 5 percent to sell near $50.86 after the home shopping network beat its earnings estimates, but was light on sales. HSNi delivered fourth-quarter diluted earnings of $1.12, better than the FactSet estimate of $1.03, but less than last year’s $1.28. Sales came in at $1.09 billion, which was just shy of the FactSet estimate of $1.10 billion. The company blamed the highly promotional retail environment on its lowered sales. However, it did note that its digital business is growing and now represents 52 percent of overall revenues.
Gildan Activewear stock is dropping over 3 percent to $23.75 as the apparel maker delivered inline earnings for the fourth quarter, but issued downward guidance. Gildan reported diluted earnings of 39 cents a share, which met the FactSet estimate, while sales of $755 million topped the FactSet estimate of $702 million. However, the company said earnings per share for fiscal year 2016 are expected in the range of $1.50 to $1.60 versus the estimated $1.77. Sales for fiscal year 2016 were guided to $2.6 billion, shy of the expected $2.72 billion. The warm winter led to lower fleece sales and weak holiday shopping hurt higher-priced products.
Target Corp. stock is up over 1 percent to $75.28 even though the discount retailer missed its earnings estimate for the fourth quarter. Target reported earnings per share of $1.52, which was short of the FactSet estimate of $1.54, but 2.1 percent better than last year. Sales came in at $21.6 billion, missing the FactSet estimate of $21.7 billion and a drop from last year’s $21.8 billion. Target said its best categories were style, baby, kids and wellness. Investors believe Target is taking the right steps in its turnaround.
Iconix Brand Group Inc. stock is down over 3 percent on news that the company hired a new chief executive officer. John Haugh will be the new ceo effective April 1 and interim ceo Peter Cuneo will transition to executive chairman.
Elsewhere, Asian markets were mixed with Japan and Hong Kong down slightly, while China rose by 0.9 percent. In Europe, all the major indices were lower as financial stocks and mining firms dragged down markets.