2 mins to read

While you were sleeping: UPDATED Wall St rally stalls, eyes on Trump

Shares in retailer Target fell 12% as it missed profit forecasts. 

Margreet Dietz
Wed, 01 Mar 2017

Wall Street weakened from record highs as investors focused on US President Donald Trump's address to Congress later in the day to assess if bets on his broad policy promises are justified.

"While markets no doubt appear to like what they are hearing, the president now needs to deliver," London-based CMC Markets chief market analyst Michael Hewson says, Bloomberg reported. "If he fails to do so, we could well see a swift market reaction."

At the close of trading in New York, the Dow Jones Industrial Average fell 25.20 points, or 0.1%, to 20,8112.24, ending a run of gains over 12 consecutive sessions.

The Nasdaq Composite Index dropped 0.6% to 5825.44 and the Standard & Poor's 500 Index declined 0.3% to 2363.64.

The US dollar also moved lower, while Treasuries gained, pushing the yield on the 10-year benchmark note one basis point lower to 2.358% from 2.367% on Monday.

"What we're looking for tonight is just more meat on those bones," New York-based Alpine Funds portfolio manager Mark Spellman told Reuters. "We've gotten these generalities and we're trying to figure out how things are going to be constructed."

The Dow weakened as slides in shares of Wal-Mart and those of Intel, down 1.1% and 1% respectively, outweighed gains in Boeing and Coca-Cola shares, up 0.8% and 0.7% respectively.

Target misses mark
Target shares sank 12% after the retailer missed the mark with its full-year profit forecast and unexpectedly announced plans to lower its prices.

"Our fourth quarter results reflect the impact of rapidly changing consumer behaviour, which drove strong digital growth but unexpected softness in our stores," chief executive Brian Cornell says.

"We will invest in lower gross margins to ensure we are clearly and competitively priced every day.

"While the transition to this new model will present headwinds to our sales and profit performance in the short term, we are confident these changes will best position Target for continued success over the long term."

Investors weren't so sure and Target's results weighed on the industry.

"It's that drum beat of bad retail news of the big-box retailers," Mr Spellman told Reuters. "So in case you thought maybe that was over, Target certainly reminded us all that it isn't."

Bucking the trend, Priceline shares jumped, up 6.3% after the company posted quarterly results that beat expectations.

The company reported "accelerating growth in hotel room nights booked, with solid organic growth and attractive profit margins," chief executive =Glenn Fogel says. "We also recorded accelerating growth in room nights booked for the full year 2016 over 2015."

In Europe, the Stoxx 600 Index ended the day with a gain of 0.2% from the previous close. The UK's FTSE 100 Index gained 0.1%, as did Germany's DAX Index, while France's CAC 40 Index increased 0.3%.



Margreet Dietz
Wed, 01 Mar 2017
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
While you were sleeping: UPDATED Wall St rally stalls, eyes on Trump