The stock market opened lower as China devalued their currency the yuan for a third day in a row and jobless claims increased. The Dow Jones Index dropped 43.36 to 17,359, the S&P 500 dropped 4.8 to 2,081 and the Nasdaq declined 6.32 to 5,038.
The market seems to be adjusting to the idea that China will probably continue dropping the value of its currency until it cuts it at least 10 percent. That’s the level that many market watchers believe will make real change for the country’s exports. The major European indices were trading higher across the board.
The latest weekly jobless claims was seen as positive even though they came in at 274,000, which was higher than the consensus of 271,000. Claims have risen over the past few weeks, but they have remained below the critical level of 300,000. The four-week moving average of claims fell 1,750 to 266,250, the lowest since April 2000.
July retail sales rose 0.6 percent, as well as up 0.4 percent excluding auto and gas. The prior month was revised up from a negative 0.3 percent to flat. Also notable is that prices in July dropped with export prices excluding agriculture decreasing 0.4 percent. Import prices excluding oil dropped 0.3 percent in July.
Clothing store sales were up 2.8 percent over last year and July increased over June by 3 percent. Department stores didn’t fare so well, with monthly sales in July down 2.7 percent from June and down 2 percent over last year. This drop was evident in today’s earnings announcements from Kohl’s and Dillard’s, as well as yesterday’s news from Macy’s.
Dillard’s stock rose 4.7 percent to $99.35 after the department store’s earnings declined even as merchandise sales rose. Dillard’s reported that net income fell 75 cents a share or $29.9 million, while total sales rose 2.6 percent to $1.51 billion. “Sales trends were notably strong in shoes followed by juniors’ and children’s apparel,” the retailer said in its report. “Sales were notably weak in the home and furniture category. Sales trends were strongest in the Central region, followed by the Eastern and Western regions, respectively.”
Kohl’s stock was getting slammed after the discount department store missed on its second-quarter earnings estimate after reporting earnings per share of $1.07 on revenues of $4.27 billion. Second-quarter estimates from Thomson Reuters were for $1.16 on revenue of $4.31 billion. Kohl’s stock was dropping 6.5 percent to $57.50 in the early trading session.
Coty’s stock moved up 5.8 percent to $30.41 after the beauty company beat fourth-quarter estimates. Coty reported earnings of 8 cents per share, beating the Zack’s estimate of 7 cents a share and a huge improvement over last year’s loss of 5 cents per share in the same period. Net income came in at $232.5 million and revenue was $4.4 billion. Coty also announced a $700 million share buyback. Coty’s has enjoyed great success with Sally Hansen Miracle Gel polish.