While you were sleeping: Wall Street slips from record

Friday 20th June 2014

Wall Street slipped, pushing the Standard & Poor’s 500 Index down from the previous day’s record-high close, as retail stocks including Coach slumped on disappointing outlooks.

In the final hour of trading in New York, the Dow Jones Industrial Average fell 0.23 percent, the Standard & Poor’s 500 Index slipped 0.15 percent, while the Nasdaq Composite Index retreated 0.44 percent.

Declines in shares of Nike, down 1.2 percent, and Exxon Mobil, down 0.9 percent, led the Dow lower.

Retailers took a beating. Shares of Coach slumped, last down 10 percent. Sales at its North American stores open at least a year will fall at a mid- to high-teens percentage rate in the year through June 2015, executives said Thursday on a conference call, Bloomberg News reported.

Shares of Pier 1 Imports sank, last down 13.3 percent, after the company downgraded its full-year earnings forecast.

“The retail environment remains highly promotional and is pressuring gross profit in the near-term,” Pier 1 Imports CEO Alex Smith said in a statement.

To be sure, shares of American Apparel climbed, last up 5.25 percent, after the company said it replaced Dov Charney as chairman and suspended him effective immediately from his positions as president and CEO because of “an ongoing investigation into alleged misconduct.”

The company said it notified Charney, American Apparel’s founder, of the intent to terminate his employment “following a 30-day cure period.” American Apparel appointed John Luttrell as Interim Chief Executive Officer.

"We take no joy in this, but the board felt it was the right thing to do," newly appointed co-chairman Allan Mayer said in a statement. "Dov Charney created American Apparel, but the company has grown much larger than any one individual and we are confident that its greatest days are still ahead."

The latest economic data offered further confirmation of strength in the recovery. Initial claims for state unemployment benefits fell 6,000 to a seasonally adjusted 312,000 for the week ended June 14, according to the Labor Department.

Separately, the Philadelphia Federal Reserve Bank’s business activity index climbed to 17.8 in June, the highest since September, and up from 15.4 in May, while the Conference Board’s US leading economic index rose 0.5 percent in May, following a 0.3 percent increase in April.

Oil continued its rise, sending Brent crude to its highest level in nine months, amid concern about a disruption in supplies from Iraq, OPEC’s No. 2 producer. President Barack Obama said the US will send military advisers to Iraq after receiving a request for help from the government as it battles insurgents in the northern part of the country.

Brent for August settlement climbed as high as US$115.27 on the London-based ICE Futures Europe exchange.

Gold and silver also advanced after the US Federal Reserve on Wednesday suggested it will keep interest rates low.

In Europe, the Stoxx 600 Index finished the session with a 0.6 percent increase from the previous close. The UK’s FTSE 100 added 0.4 percent, while France’s CAC 40 and Germany’s DAX both climbed 0.7 percent.

BusinessDesk.co.nz

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