While you were sleeping: Macy’s cuts profit outlook, Wall St falls

Wall Street weakened as a profit downgrade from Macy's and freshly disappointing data from China weighed on the market.

Other US retailers' shares dropped on a bleak earnings report from Macy's. The shares dropped 14%, after the New York department store chain posted a larger-than-expected slump in third-quarter sales and lowered its annual profit estimate. It also said it would not form a real estate investment trust.

"It's obviously troubling," Macy's chief executive Terry Lundgren told Bloomberg. "My sense is, if they [consumers] want to spend, they can. And once they've finished buying their cars and finished remodelling their houses, there's room for them to spend in our categories as time goes on."

Rivals Kohl's, Nordstrom and JC Penney will also report earnings this week. Kohl's shares dropped 6.4%, Nordstrom slid 4%, while JC Penney slid 2.7%.

On Wall Street, the Dow Jones Industrial Average and other benchmarks all fell 0.3%. The Dow finished down 55.99 points at 17,702.22,, the Standard & Poor's 500 Index at 2075.00 and the Nasdaq Composite Index at 5067.02.

US bond markets were closed for Veterans Day.

Mixed trading in Dow, oil drops
In the Dow, slides in shares of Nike and Wal-Mart outweighed advances in General Electric and McDonald's. S&P energy stocks fell 1.9% as crude oil futures droppd 2.9% to $US42.93 a barrel in futures trading.

Oil declined ahead of a report by the Energy Information Administration tomorrow, which is expected to show US crude inventories rose for a seventh week in a row, according to a report by industry group American Petroleum Institute and a Reuters poll.

The latest data from China showed the nation's industrial output increased at a lower-than-expected 5.6% in October from a year earlier. Retail sales rallied 11%.

China's weakening growth subdued the appeal, and prices, of commodities including zinc and lead.

In Europe, the Stoxx 600 Index finished the day with a 0.7% increase from the previous close. The UK's FTSE 100 Index added 0.4%, Germany's DAX Index gained 0.7%, while France's CAC 40 Index rose 0.8%.

Better-than-anticipated earnings including from Carlsberg and Henkel helped lift stocks. Corporate activity also helped, as Anheuser-Busch InBev made a formal offer to buy SABMiller for about $US107 billion. Both stocks closed higher, with SABMiller up 1.9% and AB InBev up 2.1%.

Investors are also betting the European Central Bank policymakers will add extra stimulus next month to help stoke the region's economy. A sliding euro is cementing those expectations.

"Expectations for ECB easing are still high in the market, so a weaker euro is giving good support for European equities, while better-than-expected earnings improve sentiment," Copenhagen-based Danske Bank chief analyst Allan von Mehren told Bloomberg.

"It's all part of the same equation that's contributing to quite a good outlook for Europe."

Updated for Wall Street close (10am NZ time),

(BusinessDesk)