Wall Street falls

Department stores take drubbing

US shares slipped on Friday, ending the week lower as tepid economic data weighed on banks and worries deepened over Nordstrom and other department stores.

Risk-averse sentiment gripped Wall Street last week after President Donald Trump unexpectedly fired his FBI chief, the fallout from which could delay Trump’s pro-growth goals to cut taxes and boost spending on infrastructure.

Soft retail sales and monthly inflation data on Friday raised concerns about slow economic growth and questions about whether the Federal Reserve could maintain its hawkish outlook for interest rates this year.

Federal funds futures implied a 49% chance of two more rate hikes this year, compared with 54% shortly before the release of the data, CME Group’s FedWatch tool showed.

Banks, which typically benefit from higher interest rates, dragged on the S&P 500 and Dow Jones Industrial Average. The S&P 500 financial sector fell 0.45%, while industrials were off 0.65%.

Department stores faced serious pressure for a second straight day after J.C. Penney reported lower-than-expected comparable-store sales, sending its shares down 13.99%.

Nordstrom dropped 10.84% after weak quarterly same-store sales.

Macy’s fell 3.04%, bringing its loss to more than 19% in the past two sessions following its dismal quarterly report. The less-than-expected 0.4% month-over-month increase in April retail sales stirred fears about the retail sector as well as the economy.

“The numbers were light again, people don’t seem to be spending money despite employment and income numbers being good. It’s concerning,” said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.

The Dow Jones Industrial Average declined 0.11% to end at 20,896.61 points and the S&P 500 lost 0.15% to 2,390.9.

The Nasdaq Composite added 0.09% to 6,121.23.

For the week, the Dow fell 0.5%, the S&P 500 lost 0.4% and the Nasdaq rose 0.3%.

With a better-than-expected first-quarter reporting season all but complete, S&P 500 companies on average are now predicted by analysts to grow their second-quarter earnings by 8.3%, according to Thomson Reuters I/B/E/S.

The S&P 500 is trading at 17.6 times expected earnings, higher than its 10-year average of 14.2.

GE was the top percentage loser on the Dow, down 2.08% after Deutsche Bank downgraded its shares to “sell” from “hold.”

The Bank of Israel on Friday set its representative rate for the US dollar at NIS 3.6100, for the British pound at NIS 4.6432, for the Canadian dollar at NIS 2.6353, for the Australian dollar at NIS 2.6699, and for the South African rand at NIS 0.2696. The central bank set the representative rate for the euro at NIS 3.9216, and for 100 yen at NIS 3.1766.