U.S. stock indexes fell sharply on Friday, weighed down by
consumer retail and technology stocks after disappointing forecasts from Cisco
and department store chains for the key holiday shopping season. The Dow and
the Nasdaq were off nearly 1 percent, while the S&P 500's decline was
curtailed as the index held steady near its 100-day moving average.
Dow component Cisco fell 6 percent to $26.17 after it gave a
weak forecast, citing a slowdown in order growth and weak spending outside the
United States. The stock was the second-biggest drag on the S&P and the
Nasdaq. Oracle fell 3.2 percent, Microsoft 1.4 percent and Apple slid 2.1
percent.
Data showed U.S. retail sales rose less than expected in
October, suggesting a slowdown in consumer spending that could temper expectations
of a strong pickup in fourth-quarter economic growth. The weak data follows
disappointing reports from department store chains in the past two days. Macy's
and Nordstrom in particular have both reported disappointing results and
lowered their full-year forecasts.
Consumer stocks have been one bright spot this year as weak
commodity prices, fears of a global slowdown and the anticipation of a U.S.
rate hike have hit most stocks, especially those of materials, energy and
industrial companies. While the consumer staples sector .SPLRCS moved into the
red for the year earlier this week, consumer discretionary .SPLRCD stocks are
still the best performing of the 10 major S&P sectors, up 8.4 percent this
year.
At 11:14 a.m. ET, the Dow Jones industrial average was down
153.06 points, or 0.88 percent, at 17,295.01. The S&P 500 was down
15.8 points, or 0.77 percent, at 2,030.17 and the Nasdaq Composite index was
down 50.86 points, or 1.02 percent, at 4,954.22. Seven of the 10 major S&P
sectors were lower, with the consumer discretionary sector's .SPLRCD 1.84
percent fall leading the decliners. Technology stocks .SPLRCT were down 1.5
percent.
Mylan MYL.N jumped 13.5 percent to $49.08 after its $26
billion hostile bid for Perrigo collapsed. Perrigo fell 6 percent to $147.08.
Mylan was the biggest influence on the S&P and Nasdaq. Declining issues
outnumbered advancing ones on the NYSE by 1,841 to 1,071. On the Nasdaq, 1,553
issues fell and 1,029 advanced. The S&P 500 index showed no new 52-week
highs and 31 new lows, while the Nasdaq recorded 15 new highs and 142 new lows.
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