Tech leads market lower
NEW YORK — Retailers and smaller U.S. companies jumped again Friday as they continued to report strong third-quarter results, but technology companies and other big U.S. corporations couldn’t add to the previous day’s gains.
A slew of retailers including discount chain Ross Stores, shoe store Foot Locker and clothing companies Gap and Abercrombie & Fitch soared following strong results or forecasts. Wal-Mart helped kick off a retail rally a day ago. Technology, health care and industrial companies slumped. On Thursday they led stocks to their biggest gain in two months.
Investors have liked what they’ve seen from retailers the last two days. Invesco Global Market Strategist Kristina Hooper said the companies are giving a double dose of good news. Consumers are spending more, and there are signs some companies are figuring out how to survive in a world where more and more sales are made online.
“Businesses are starting to evolve and alter their models and may be able to survive quite well in very changed circumstances,” she said. “This is only the beginning of what they’re going to need to do to stay competitive.”
The Standard & Poor’s 500 index fell 6.79 points, or 0.3 percent, to 2,578.85. The Dow Jones industrial average gave up 100.12 points, or 0.4 percent, to 23,358.24. The Nasdaq composite dipped 10.50 points, or 0.2 percent, to 6,782.79 after it closed at a record high Thursday.
The Russell 2000 index of smaller and more U.S.-focused stocks climbed 5.94 points, or 0.4 percent, to 1,492.82. Most of the companies on the New York Stock Exchange rose.
The S&P 500 finished slightly lower for the second week in a row after an eight-week winning streak.
Ross Stores jumped $6.56, or 10 percent, to $72.25 after its profit and sales were greater than expected, and the company raised its forecast for the rest of the year. The discount retailer said its business remained strong even though it dealt with the effects of several major hurricanes. Gap, too, did better than expected as sales at Old Navy and Athleta improved and it cut spending. Its stock gained $1.92, or 7 percent, to $29.40.
Foot Locker had a solid quarter and said that in spite of steep discounts, it expects to meet or “modestly exceed” its annual profit and sales forecasts. It surged $8.97, or 28.2 percent, to $40.82. Hibbett Sports raised its profit forecast and expects a smaller decline in an important sales measurement. Its stock climbed $2.25, or 15.2 percent, to $17.10. Foot Locker has fallen 42 percent this year and Hibbett has dropped 54 percent.
Twenty-First Century Fox continued to soar on growing speculation that some of the media company’s assets will be sold. Comcast is in talks to buy Twenty-First Century Fox’s movie studio, some of its cable channels, and its international business. The Wall Street Journal and CNBC first reported Comcast’s interest. The Journal reported that Verizon and Sony are also interested in some of Fox’s assets.
Reports last week said Disney recently discussed a deal with Fox for the same businesses Comcast is now interested in. Fox is up 25 percent in two weeks after it gained $1.83, or 6.2 percent, to $31.15. Comcast fell 91 cents, or 2.5 percent, to $36.16. Verizon picked up 65 cents, or 1.5 percent, to $45.42.