While you were sleeping: UPDATED Macy’s, Disney lead drop on Wall Street

Wall Street declined amid disappointing earnings from Macy's and Walt Disney, which fuelled concern US consumers are keeping their purse strings tight.

Shares of Macy's tumbled 15%, its biggest one-day fall since 2008, after the largest US department store company downgraded its full-year sales and earnings outlook.

"We are seeing continued weakness in consumer spending levels for apparel and related categories," says Terry Lundgren, Macy's chief executive officer.

"In particular, our sales trend relative to expectations meaningfully slowed beginning in mid-March, and first quarter results are below our original outlook.

"Headwinds also are coming from a second consecutive year of double-digit spending reductions by international visitors in major tourist markets where Macy's and Bloomingdale's are key destinations, as well as a slowdown in some centre core categories, further intensifying the challenges associated with growing top-line sales revenue."

Macy's gloomy outlook pushed shares of other retailers such as Nordstrom and Wal-Mart lower, too.

At the close, the Dow Jones Industrial Average was down 217.23 points, or 1.2%, at 17,711.12 while the Nasdaq Composite Index shed 1% to 4760.69. The Standard & Poor's 500 Index also fell 1% to 2064.46.

Disney falls short
Declines in shares of Walt Disney and those of Wal-Mart, down 4% and 2.8% respectively, led the drop in the Dow.

Disney reported quarterly results that failed to meet analysts' expectations. It was the first shortfall against analysts' projections in five years, according to data compiled by Bloomberg. The company has shut down its Infinity video-games unit.

Shares of Fossil plunged 29% after the company cut its full-year earnings forecast.

"We're getting a lot of news on US consumers today and it isn't good news," Pittsburgh-based Fort Pitt Capital Group senior equity research analyst Kim Forrest told Reuters.

Meanwhile, shares of Office Depot and Staples sank 40% and 18% respectively after their planned merger was blocked by regulators.

US crude oil rose 3.5% to $US46.23 a barrel, the highest settlement since November.

In Europe, the Stoxx 600 Index ended the session with a 0.5% drop from the previous close. France's CAC 40 index slid 0.5%, while Germany's DAX index dropped 0.7%. The UK's FTSE 100 index eked out a 0.1% gain.

Shares of Austria's Raiffeisen Bank International closed 11% lower after it said it is considering a merger with its majority owner.

"Earnings so far have been OK but not strong enough to deliver a real upside for stock prices," Dusseldorf-based Bankhaus Lampe strategist Ralf Zimmermann told Bloomberg.

"What is still really missing from this environment is a notable rally in the banking stocks which is an important driver for any stockmarket rally."

(BusinessDesk)