The stock market continued to fall on Friday, after Thursday’s rout with the Dow Jones Index dropping another 154 points to 16,810, the S&P 500 losing 19.95 points to 2,014 and the Nasdaq down 68.07 points to 4,809. Continuing turmoil in China spread across the globe as the Shanghai Composite dropped another 4.2 percent, causing the European indices to trade lower across the board.
The selling took hold in China after the August flash manufacturing report came in and was the lowest level since 2009. This is pointing to a weak economy and reinforces the weak market sentiment. In addition to that, tensions increased in North and South Korea as gunfire was exchanged and North Korea’s leader Kim Jong-Un declared his country was in a “quasi-state of war.”
Even as it looks like the Chinese economy is falling apart, Gap Inc.’s chief executive officer Art Peck said he doesn’t see any significant headwinds there. He said the business is growing and on the conference call stated, “As far as I’m concerned, no change in strategy, no change in direction, no change in intensity, as we continue to look at China as a significant long-term growth story.” Peck said The Gap was processing the currency devaluation, but continued to be very bullish on China. Gap is trading down almost 1 percent to $33.27 following its earnings release on Thursday after the market close.
Foot Locker is winning with the ath-leisure trend after reporting strong second-quarter earnings. Foot Locker reported revenue of $1.7 billion for the quarter, easily beating the Zack’s estimate of $1.66 billion. The earnings came in at 84 cents per share versus the estimated 69 cents. Even though foreign currency issues affected Foot Locker, it managed to increase total sales for the quarter by 3.3 percent over last year. Unfortunately with the market tanking, Foot Locker stock is also down 1.4 percent to $70.66.
Uniqlo is changing its work week to four days. The Japanese retailer Fast Retailing, which owns Uniqlo, is going to test out a four-day week, but workers will have to work 10 hours a day during those four days, and they will include weekends. If the test goes well, it could implement the work shift to other countries.