Retail shares suffer maximum losses
U.S. stocks ended lower on Wednesday, 11 May 2016 weighed by sharp losses in retail shares and a steep drop in entertainment giant Walt Disney after disappointing quarterly results. A slide in consumer-discretionary stocks, which include retail shares such as Macy's and Nike, weighed on the Dow and S&P 500, offsetting a 4% jump in oil prices.
The Dow Jones Industrial Average ended 217 points, or 1.2%, lower at 17,711, led by Walt Disney Company's 4% selloff and a 3.7% drop in Nike. The S&P 500 dropped 20 points, or 1%, to 2,064. The Nasdaq Composite declined 49.19 points, or 1%, to 4,760.69.
Nine of the 10 main sectors closed lower. The S&P 500's consumer-discretionary sector led the losses, declining 2%, led by double-digit losses from retailers. Of the 30 blue-chip stocks, all but one ended in negative territory. Only Microsoft closed marginally higher.
Staples was the biggest loser within the S&P 500, diving 18% following news that its planned buyout of rival Office Depot ended unsuccessfully.
On the upside, Electronic Arts rose 14%, making it the best-performing stock in the S&P 500. The maker of video games late Tuesday reported better-than-expected quarterly results.
The ICE U.S. Dollar Index rose in six of the past seven days but dipped on Wednesday.
There were little new economic or policy drivers for the dollar, which remains underpinned by expectations the Federal Reserve will likely raise interest rates modestly some time this year, presumably putting the dollar in higher demand than currencies from lower-rate regions. That, in turn, dulls demand for assets that don't offer a yield.
Today's economic data at Wall Street included the weekly MBA Mortgage Index and the Treasury Budget for April. The MBA Mortgage Index showed a seasonally adjusted increase of 0.4%. This compares to last week's reading of -3.4%. Bolstered by individual tax receipts, the Treasury Budget for April showed a surplus of $106.5 billion; however, that was much less than the surplus of $156.7 billion seen in the same period a year ago.
Crude oil futures soared past $46 a barrel on Wednesday, 11 May 2016 to settle at their highest level in more than six months. The climb was supported by a U.S. government report that revealed an unexpected weekly drop in crude inventories and a ninth straight week of falling domestic production.
June West Texas Intermediate crude tacked on $1.57, or 3.5%, to settle at $46.23 a barrel on the New York Mercantile Exchange. July Brent crude on London's ICE Futures exchange added $2.08, or 4.6%, to end at $47.60 a barrel.
Prices turned higher after the U.S. Energy Information Administration reported a 3.4 million-barrel decline in crude-oil supplies for the week ended 6 May 2016. The EIA also said that total domestic production fell by 23,000 barrels a day to 8.802 million barrels a day last week. That marked a ninth week of output declines in a row.
The Treasury complex ended off its high with the yield on the 10-yr note falling three basis points to 1.73%.
Bullion prices ended higher at Comex on Wednesday, 11 May 2016. Gold futures settled higher on Wednesday, rebounding from a nearly two-week low as a pullback in the U.S. dollar boosted the appeal of the precious metal.
Gold for June delivery rose $10.70, or 0.9%, to settle at $1,275.50 an ounce, while July silver added 22.7 cents, or 1.3%, to $17.319 an ounce.
Today's participation was above the recent average as more than 922 million shares changed hands on the NYSE floor.
Tomorrow morning the Bank of England will announce its latest policy decision at 7:00 ET.
At Wall Street, tomorrow's economic data will be limited to weekly initial claims (consensus 270k) and Import and Export Prices for April, which will all be released at 8:30 ET.
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