There wasn’t anything on the economic data calendar today. But some bad news from retailers and some hawkish words from Fed officials kept things interesting today.
First, the scoreboard:
- Dow: 16,374.3 (-137.5, -0.8%)
- S&P 500: 1,872.8 (-12.2, -0.6%)
- Nasdaq: 4,096.8, (-28.9, -0.7%)
And now the top stories:
- On Monday afternoon, Urban Outfitters reported that sales at its namesake store plunged 12% during the first quarter. “While Anthropologie and Free People continue to deliver record levels in sales and profits, Urban Outfitters had a disappointing quarter and is working diligently to regain its fashion footing,” said CEO Richard Hayne. URBN fell 8.8%.
- Dick’s Sporting Goods announced weaker-than-expected quarterly sales and earnings. “Our difficulties this quarter were isolated to two categories: golf and hunting,” said CEO Edward Stack. “After a very challenging first quarter in golf last year, we expected some further headwinds and only modest improvement, but instead we saw a continued significant decline. In the case of hunting, we planned the business down based on last year’s catalysts, but it was even weaker than expected.” DKS plunged 17.9%.
- The TJX Companies, which owns T.J. Maxx and Marshalls, also announced weak financial results. “For the first quarter, our consolidated comparable store sales increased 1%, and our earnings per share of $.64 were slightly below our expectations with a negative impact from foreign currency exchange rates that was larger than our guidance assumed,” said CEO Carol Meyrowitz. “While sales were not as strong as we would have liked, predominantly in our apparel business, I was very pleased that overall business trends improved as the quarter progressed.” TJX fell 7.6%
- Caterpillar disclosed that its rolling 3-month sales through April tumbled 13%. Latin America; Asia/Pacific; and Europe, Africa and Middle East (EAME) also saw sharp declines during the period. Caterpillar is recognized as a bellwether of economic activity. CAT declined 3.6%.
- New York Fed President William Dudley took a somewhat dovish tone today while speaking to the New York Association for Business Economics. “My current thinking is that the pace of tightening will probably be relatively slow,” he said addressing the Fed’s current loose policy.
- Philadelphia Fed President Charles Plosser expressed optimism on the economy, which could be seen as hawkish. “I expect that the unemployment rate will fall below 6.2 by the end of 2014,” he said. “If anything, this forecast may prove to be too pessimistic. Given the recent trends, an unemployment rate below 6 percent is certainly plausible.” Regarding the Fed’s current pace of tapering its monthly bond purchases, he warned: “If the FOMC continues this path of measured reductions, the purchase program will end sometime this fall. If the economy continues to improve, though, we could find ourselves still trying to increase accommodation in an environment in which history suggests that policy should perhaps be moving in the opposite direction.”
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