Member log in

While you were sleeping: Lululemon slides

Wall Street declined as investors awaited a slew of US corporate earnings to gauge whether, and for which companies, the pickup in the economic recovery has translated to an improvement in the bottom line.

In afternoon trading in New York today, the Dow Jones Industrial Average fell 0.38 percent, the Standard & Poor's 500 Index slid 0.41 percent, while the Nasdaq Composite Index shed 0.32 percent. Declines in shares of Exxon Mobil and those of Walt Disney, both down 1.4 percent, led losses in the Dow.

"People are sitting on their hands, waiting for major results to figure out how strong this season may be," Douglas DePietro, managing director at Evercore Partners in New York, told Reuters.

Some already fell short of the mark. Shares of Lululemon sank, last down 15.8 percent, after the high-end yogawear retailer downgraded its earnings outlook.

"We were on track to deliver on our sales and earnings guidance through the month of December; since the beginning of January, we have seen traffic and sales trends decelerate meaningfully," Chief financial officer John Currie said in a statement.

"Based on this recent performance and assuming these trends continue through the remainder of January, we are reducing our outlook for the fourth quarter."

Shares of Merck, however, jumped, last up 6 percent, on the company's progress in developing new drugs including for skin cancer and blood-clotting. The company also said it is exploring strategic options for its animal health and consumer care businesses.

"We're taking significant and decisive action to make Merck a more competitive company, better positioned to drive innovation and growth," Kenneth Frazier, chairman and chief executive officer of Merck, said in a statement.

"We're pleased with the solid progress we have already made against each of our key areas of focus, and we are quickly moving ahead to build on this momentum to make Merck a leaner, more agile company focused on the best opportunities to create value and advance global health."

Shares of Juniper Networks also gained, last up 8.5 percent. The company has been targeted by Elliott Management, a New York fund run by billionaire Paul Singer, which will seek cost cuts, stock buybacks and other changes, Bloomberg News reported, citing two people familiar with the matter. Elliott is seeking talks with management and the company's board.

In Europe, the Stoxx 600 Index added 0.2 percent from the previous close. The UK's FTSE 100 and France's CAC 40 both gained 0.3 percent, while Germany's DAX rose 0.4 percent.

On commodities markets, nickel surged after Indonesia's ban on unprocessed ore exports took effect. London Metal Exchange nickel rose 4 percent on Friday and added a further 1.4 percent on Monday.

Nickel may rise further, but a break above US$15,000 a tonne - which has capped its trading band for the past six months - could be a sell signal, a Singapore-based metals trader told Reuters.

(BusinessDesk)

More by Margreet Dietz