Sharechat Logo

While you were sleeping: Nike outlook misses

Thursday 24th March 2016

Text too small?

Wall Street slid as Nike predicted slower-than-expected sales growth, fuelling concern about the company’s profit outlook, while energy stocks declined with the price of oil.

In New York trading at 1.10pm, the Dow Jones Industrial Average fell 0.09 percent, while the Nasdaq Composite dropped 0.71 percent. In New York trading at 12.55pm, the Standard & Poor’s 500 Index declined 0.32 percent. 

The Dow fell as slides in shares of Nike and those of Chevron, last down 2.9 percent and 1.8 percent weaker respectively, outweighed gains in shares of UnitedHealth and those of Visa, last up 1.8 percent and 1.4 percent respectively.

Nike reported disappointing quarterly revenue and predicted sales would increase by a high-single-digit percentage during the next fiscal year, missing analysts’ forecasts.

“Expectations were high, so they have to nail it or blow it out -- and they didn’t,” Brian Yarbrough, an analyst for Edward Jones, told Bloomberg. “Any hiccup can cause this kind of reaction in the stock.”

Chevron fell with other energy stocks as oil declined after a report showed a higher-than-forecast climb in US inventories. 

“We don't like to have big positions over long weekends, and we'll probably work on cleaning those up over the next few days,” Doug Burtnick, senior investment manager at Aberdeen Asset Management, told Reuters.

Indeed, a government report on US gross domestic product, due Friday when US markets will be closed, may also contain some bad news on corporate profits. 

It is expected to show that corporate pre-tax earnings fell 9.5 percent in the fourth quarter from a year earlier, after dropping 5.1 percent in the third, Bloomberg reported, citing at economists at JPMorgan Chase & Co in New York. That would be the biggest decline since the final months of 2008.

The latest housing data showed US home sales rose 2.0 percent to a seasonally adjusted annual rate of 512,000 units in February, following an upwardly revised rate of 502,000 units in January.

The Chicago Board Options Exchange Volatility Index, or VIX which is known as Wall Street’s fear gauge, last traded 3.2 percent higher at 14.62.

The Dollar Index, which measures the greenback against a basket of six major currencies, last traded 0.5 percent higher.

Shares of Pinnacle Foods sank, down 10.1 percent in early afternoon trading in New York, after Keurig Green Mountain poached its CEO, Bob Gamgort.

Gamgort will start his new role on May 2 and replaces Brian Kelley, who will become vice chairman of the board, Waterbury, Vermont-based Keurig said in a statement. Earlier this year a consortium led by privately-held JAB Holding bought Keurig. 

“I see a significant opportunity to build upon Keurig's unique combination of brands, partners and technologies by accelerating innovation and expanding penetration of single-serve systems to continue winning in the consumer market,” Gamgort said in the Keurig statement.

In Europe, the benchmark Stoxx Index ended the session with a decline of nearly 0.1 percent from the previous close. France’s CAC 40 fell 0.2 percent. 

The UK’s FTSE 100 added 0.1 percent, while Germany’s DAX rose 0.3 percent.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report