Wall St ends flat; economic data offsets retailer results

By Caroline Valetkevitch

(Reuters) - U.S. stocks ended little changed on Tuesday as declines in Home Depot and other retailers following results offset upbeat U.S. retail sales data.

Home Depot's stock was down 2.7 percent and was the biggest drag for both the S&P 500 and Dow. Although the home improvement chain reported strong earnings and raised its forecast, investors appeared to be worried about supply constraints in the housing market that could be a drag on Home Depot's future earnings.

Shares of smaller rival Lowe's Cos were down 4.4 percent.

The S&P 500 consumer discretionary index <.SPLRCD>, down 0.9 percent, also took a hit from a steep fall in the shares of Coach and Advance Auto Parts after disappointing results. The S&P 500 retail index <.SPXRT> was down 1.6 percent.

 

However, U.S. retail sales recorded their biggest increase in seven months in July as consumers boosted purchases of motor vehicles as well as discretionary spending.

The data helped the dollar touch its highest level against a basket of major currencies <.DXY> in nearly three weeks.

"The retail sales numbers that came out today - that's nothing but good news. We had a positive surprise for this month and upward revisions for the past two months," said Brad McMillan, chief investment officer for Commonwealth Financial Network in Waltham, Massachusetts.

"People are spending but they're not spending on the same things. So from an economic perspective, it's all good news. From a company-level perspective, there are winners and there are losers."

The Dow Jones Industrial Average <.DJI> was up 5.28 points, or 0.02 percent, to 21,998.99, the S&P 500 <.SPX> lost 1.23 points, or 0.05 percent, to 2,464.61 and the Nasdaq Composite <.IXIC> dropped 7.22 points, or 0.11 percent, to 6,333.01.

The markets had rebounded in the last two sessions after a standoff between the United States and North Korea showed signs of easing.

North Korean leader Kim Jong Un has delayed a decision on firing missiles towards Guam while he waits to see what the United States does, the North's state media reported.

Investors also weighed the likelihood of whether tax reform will happen this year. The failure of Republicans to push through a health care bill has dented optimism about other White House initiatives.

The top tax law writer in the U.S. House of Representatives insisted that tax reform will happen this year, but others were less confident.

Shares of General Electric were down 0.9 percent and fell to an intraday low of $25.10, their lowest point since October 2015. A late Monday quarterly report from Warren Buffett's Berkshire Hathaway Inc showed it shed its investment in the industrial conglomerate.

Declining issues outnumbered advancing ones on the NYSE by a 1.76-to-1 ratio; on Nasdaq, a 2.05-to-1 ratio favoured decliners.

The S&P 500 posted 49 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 98 new highs and 85 new lows.

The day's trading volume was among the lowest of the year, with about 5.3 billion shares changing hands on U.S. exchanges. That compares with the 6.3 billion daily average for the past 20 trading days, according to Thomson Reuters data.

(Additional reporting by Sruthi Shankar in Bengaluru; Editing by Anil D'Silva and Nick Zieminski)