Business / U.S. News

US stocks drop; Wal-Mart slumps on weak guidance

FILE - In this June 5, 2015 file photo, Wal-Mart Store, Inc., Chief Executive Officer Doug McMillon speaks at the Wal-Mart shareholder meeting in Fayetteville, Ark. Wal-Mart on Wednesday, Oct. 14, 2015 said it expects profit to fall for its next fiscal year and cut its sales outlook for this year as it works to fend off intensifying competition and perk up stores with better customer service. (AP Photo/Danny Johnston, File)

FILE – In this June 5, 2015 file photo, Wal-Mart Store, Inc., Chief Executive Officer Doug McMillon speaks at the Wal-Mart shareholder meeting in Fayetteville, Ark. Wal-Mart on Wednesday, Oct. 14, 2015 said it expects profit to fall for its next fiscal year and cut its sales outlook for this year as it works to fend off intensifying competition and perk up stores with better customer service. (AP Photo/Danny Johnston, File)

NEW YORK (AP) — U.S. stocks declined in afternoon trading Wednesday as investors assessed the latest earnings reports. Wal-Mart fell sharply after the company said that sales would be “relatively flat” this year because of currency fluctuations. JPMorgan Chase led financial stocks lower as its earnings fell short of analysts’ expectations.

Industrial stocks fell as a report from the Federal Reserve showed that factory output remained weak, in part because of the strong dollar.

KEEPING SCORE: The Standard & Poor’s 500 index was down eight points, or 0.4 percent, to 1,995 as of 3:23 p.m. Eastern time. The Dow Jones industrial average fell 149 points, or 0.9 percent, to 16,932. The Nasdaq composite fell nine points, or 0.2 percent, to 4,786.

MIXED BANK BAG: Investors were assessing the earnings of three big banks on Wednesday. While Bank of America gained after reporting earnings, JPMorgan and Wells Fargo declined. JPMorgan said late Tuesday that its profit climbed 22 percent, but its earnings still fell short of analysts’ estimates.

JPMorgan’s stock fell $1.75, or 2.8 percent, to $59.83. Wells Fargo reported a slight gain in profits for the quarter, but its lending margins fell. Wells Fargo edged down 66 cents, or 1.3 percent, to $51.21. Bank of America rose 8 cents, or 0.5 percent, to $15.59.

WAL-MART WORRIES: Wal-Mart Stores slumped $6.43, or 9.6 percent, to $60.31 after the retailer announced that its sales would be flat this year because big fluctuations in currency markets had crimped the value of its overseas sales. Wal-Mart also said its earnings per share would shrink by as much as 12 percent in 2017 due to an investment program.

THE QUOTE: Despite rebounding in October, the S&P 500 and the Dow are still lower for the year after a big slump in the previous two months on worries about the outlook for global economic growth. Some investors say the declines are overdone, and they’re expecting a bounce back in the final quarter of the year.

“The U.S. is in pretty good shape,” said Michael Scanlon, managing director and portfolio manager at John Hancock Asset Management. “You can overreact and take a view on every economic data point that we get, but that’s probably not in your best interest.”

TRAVEL TIE-UP: TripAdvisor surged after the travel website operator announced a tie-up with online travel booking company the Priceline Group that will bring several of its brands, including Booking.com, to TripAdvisors’ instant booking platform. TripAdvisor jumped $16.92, or 25 percent, $83.51.

METALS: Gold rose $14.40 to $1,179.80 an ounce. Silver climbed 21 cents to $16.12 an ounce and copper rose 3 percent to $2.42 a pound.

EUROPE’S DAY: In Europe, the FTSE 100 index of leading British shares was down 1 percent. Germany’s DAX fell 1.2 percent and in France the CAC-40 was 0.7 percent lower.

CHINA DATA: Inflation eased in China last month, stoking expectations that Beijing would have more leeway for interest rate cuts or other measures to boost economic growth. Consumer prices rose 1.6 percent over the same month year earlier, down from the 2 percent gain in August.

ASIA’S DAY: Asian stocks closed lower for a second day. Japan’s Nikkei 225 slid 1.9 percent, South Korea’s Kospi dropped 0.5 percent. Hong Kong’s Hang Seng was down 0.7 percent and the Shanghai Composite Index in mainland China finished 0.9 percent lower.

ENERGY: Benchmark U.S. crude edged down two cents to close at $46.64 a barrel on New York Mercantile Exchange. Brent crude, used to price international oils, nine cents to close at $49.15 a barrel in London.

BONDS AND CURRENCIES: Bond prices rose. The yield on the 10-year Treasury note fell to 1.98 percent. The euro rose to $1.1488 while the dollar slipped to 118.71 yen.

 

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