The News Herald (Willoughby, OH)
Midday rally fades as sporting goods stocks are penalized
NEW YORK » U.S. stocks slumped in the final minutes of trading Friday and ended a rough week with more losses. Bad news from sporting goods retailers weighed on the market.
A day before, stocks had taken their biggest loss in three months. They opened lower after retailers Foot Locker and Hibbett Sports gave dour quarterly reports. The losses eased and stocks briefly turned higher following reports that President Donald Trump’s chief strategist, Steve Bannon, left his White House post. Investors felt that makes it a bit more likely the administration can achieve at least some of its pro-business agenda.
Major stock indexes are at their lowest levels since early July as investors respond to tensions between the U.S. and North Korea, two terrorist in Spain on Thursday, and mounting challenges to the Trump agenda of tax cuts, infrastructure spending and reduced regulation. But the market hasn’t had a severe reaction to all that news. The Standard & Poor’s 500 index is only 2.2 percent below the record high it set earlier this month.
“There is a tremendous amount of optimism that is supporting the market even in the face of extraordinary stress,” said Brad McMillan, chief investment officer at Commonwealth Financial Network. “The question is, will politics pull that down? And the answer seems to be no, because the market has learned not to pay that much attention.”
The S&P 500 lost 4.46 points, or 0.2 percent, to 2,425.55. The Dow Jones industrial average fell 76.22 points, or 0.3 percent, to 21,674.51. The Nasdaq composite shed 5.39 points, or 0.1 percent, to 6,216.53. The Russell 2000 index of smaller-company stocks gave up 1.15 point, or 0.1 percent, to 1,357.79. The index has fallen 6 percent since July 25.
Athletic gear retailer Foot Locker plunged to its biggest loss in almost nine years. The company said some high-priced sneakers didn’t sell as well as it hoped, and there aren’t a lot of exciting new shoes on the market. It doesn’t expect that problem to clear up soon and it now plans to close at least 135 stores, up from 100. The stock dropped $13.32, or 27.9 percent, to $34.38 in heavy trading.
Hibbett Sports cut its annual forecasts and its stock fell 60 cents, or 5.2 percent, to $10.90. It’s down 71 percent this year, and Foot Locker has fallen 52 percent. Companies that make athletic goods also lost ground, and Nike sank $2.51, or 4.4 percent, to $54.95. Real estate companies that own shopping malls and other retail locations also fell. Simon Property Group, which declined $3.62, or 2.3 percent, to $153.58.
Deere tumbled after its sales in the fiscal third quarter came in lower than investors hoped. The company’s profit got a large boost after the company sold some of its stake in SiteOne Landscape Supply, and analysts said they were disappointed with the company’s equipment sales. The stock dropped $6.67, or 5.4 percent, to $117.31.