U.S. stocks continue to feel the effects of a troubled market as all the major indices dropped into the red this morning. A weakening Chinese currency and a nuclear test in North Korea piled on to the rest of the global concerns.
The People’s Bank of China had said over a month ago that it was no longer pegging the yuan to the U.S. dollar and that the fallout would not be pretty. On Wednesday it set the official midpoint for the currency at 6.5314 per dollar, the lowest level in four-and-a-half years. China’s Shanghai Composite ended the day higher by 2.3 percent, but Japan and Hong Kong both closed lower.
The S&P 500 is falling 30 points to 1,986, the Dow Jones Industrial Average is sliding 262 points to 16,895 and the Nasdaq is slipping 75 points to 4,815.
Fitbit stock got slammed on Tuesday even though the company unveiled a new smartwatch at the Consumer Electronics Show in Las Vegas. The stock sold off by more than 18 percent to $24.30 and the selling continues today with another drop of 2 percent down to $23.80. Tuesday was a big day for wearable technology as Under Armour launched its full line of smart devices and Fossil said it would be selling 100 different items in the same category. The increasingly crowded space means there will be many more choices than Fitbit and that doesn’t even take into account the Apple iWatch. Fitbit’s stock has tumbled 39 percent over the past six months.
Iconix Brand Group is up more than 3 percent to $6.65 after Mike Ashley’s Sports Direct took a 9 percent stake in the company. The U.K. retailer has had a long-standing interest in Iconix’s Umbro brand. The stake was built up over seven weeks at the end of 2015, but Sports Direct won’t have any voting rights. The company though sees some opportunity in Iconix. Sports Direct has 661 stores and sells goods under its own brands.
The S&P Retail ETF fell over 1 percent to $42.69 and the Market Vectors Retail ETF dropped almost 1 percent to $76.29.
December ADP payrolls soared to 257,000, way better than the expected 198,000 and the biggest jump since December 2014. The energy sector continues to shed jobs, while the service sector keeps adding in big numbers.
Crude oil dropped another $1 to trade near $34.95 a barrel as investors are pushing their money over to safe havens like treasuries, where the 10 year note is up modestly and gold continues its comeback, rising $8.50 to $1,087 an ounce.
Elsewhere in the world, the penguin is going to the desert. Perry Ellis said it has entered into an agreement with Al Matjar Al Watany Trading to design and distribute Original Penguin by Munsingwear sportswear in Saudi Arabia. It’s an iconic American brand and a social media campaign will get underway to introduce the company to the public in Saudi Arabia.