The stock market was mixed Thursday at midday as more earnings reports from retailers were mixed. Cisco Systems plunged on weak guidance.
The Nasdaq composite erased early losses to gain 1.1%. The S&P 500 gained 0.2% as indexes moved off session lows.
The Dow Jones Industrial Average was down 0.3% Thursday afternoon, mainly because of Cisco. The stock tumbled 13% to the lowest price since November 2020. The networking equipment maker reported mixed April-quarter results and gave weak guidance. The company said China's Covid lockdowns worsened supply-chain snarls. Cisco is having its worst day since Feb. 10, 2011, when it fell 14.2%, according to Dow Jones Market Data.
The small-cap Russell 2000 index gained 1.1%.
The spillover from Cisco also hurt some technology stocks. Apple fell 1.8% and is at the lowest point since October.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 31382.74 | -107.33 | -0.34 |
| S&P 500 | (0S&P5) | 3933.60 | +9.92 | +0.25 |
| Nasdaq | (0NDQC ) | 11549.95 | +131.80 | +1.15 |
| Russell 2000 | 178.13 | +1.89 | +1.07 | |
| IBD 50 | 30.41 | +0.19 | +0.63 | |
Last Update: 12:20 PM ET 5/19/2022 |
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Volume rose on the Nasdaq and NYSE compared with the same time on Wednesday.
The Consumer Staples Select Sector SDPR ETF lost 1.7%, adding to Wednesday's 6.4% rout. The rout has been led by weak earnings from Walmart, down another 2% Thursday, and Target, down another 4%.
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But there was a glimmer of hope from retailers. Kohl's shares climbed 2% although the chain reported first-quarter adjusted earnings of 11 cents a share on Thursday, missing analysts' forecasts. Analysts expected Kohl's to post adjusted earnings of 69 cents a share on $3.6 billion in revenue, according to FactSet. Same-store sales in the quarter fell 5.2%, missing analysts' expectations of positive growth of 0.5% year over year.
The retailer also cut its guidance for the fiscal year.
Shares of BJ's Wholesale Club jumped 10% after the company reported earnings and sales that beat analysts' estimates. BJ's reported earnings of 87 cents a share on sales of $4.5 billion. Analysts had expected earnings of 72 cents a share on sales of $4.24 billion.
The price of U.S. crude oil rose 0.2% to $109.87 a barrel after plunging to as low as $105.13 in early morning trading.
Today's economic and housing data didn't offer much help for the stock market. The number of jobless claims rose to 218,000 last week from a revised 197,000 the previous week. Economists had expected claims to stay at 197,000, according to Econoday.
Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance, said the increase wasn't much more than expected. But major damage is already done, with quarterly results from major retailers such as Walmart and Target indicating that inflation is beginning to hurt the economy.
Economic, Housing Data Point To Weakness
"The stock market is square in the crosshairs of the Federal Reserve, which no longer has its back and is solely focused on slowing inflation back down to their long-range target of 2%," Zaccarelli said in a commentary.
Existing-home sales fell 2.4% in April to a 5.61 million annualized rate, from a revised 5.75 million annualized in March. Existing-home sales in April were down 5.9% from April 2021. Both numbers add to the drop in housing starts and housing permits as reported on Wednesday.
"Existing-home sales are down meaningfully in year-over-year terms," said Bill Adams, chief economist for Comerica Bank. "This drop in existing-home sales is mostly due to a lack of inventories. Rising prices demonstrate that housing demand continues to exceed supply. The market is starting to normalize as the Fed withdraws monetary stimulus and mortgage interest rates rise. But with the labor market strong and wages rising, an outright decline in house prices seems unlikely."
Economic fears also are bringing down Treasury yields. The yield on the 10-year Treasury note fell 7 basis points to 2.82%.
The Innovator IBD 50 ETF gained 0.5%, helped by oil, coal and shipping stocks.
Follow Michael Molinski on Twitter @IMmolinski
