Wal-Mart, HP weigh on stocks
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Tue, 13 May 2008 15:30:00 GMT |
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Reuters |
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US (Business) |
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By Kristina CookeNEW YORK (Reuters) - Stocks fell on Tuesday, after Wal-Mart Stores Inc's outlook disappointed and as Hewlett-Packard shares dragged after it struck a deal to buy Electronic Data Systems for $12.6 billion.The developments overshadowed earlier optimism after a government report showed surprising strength in April retail sales, excluding the hard-pressed autos sector.Hewlett-Packard Co was the top weight on the S&P 500 and the Dow, with its shares down 5.3 percent at $44.27. Some Wall Street analysts were critical of the deal, saying HP was paying a rich premium for a slow-growing business.While Wal-Mart posted stronger-than-expected earnings, the retailer indicated results for the current quarter could miss Wall Street estimates as it faces a tough economic environment, higher transportation costs and customers who are running out of money between paychecks. Shares fell 1.5 percent to $57.11.Financial stocks were also a drag after Oppenheimer analyst Meredith Whitney cut her price targets on Goldman Sachs , Lehman Brothers , Merrill Lynch and Morgan Stanley . Whitney said the outlook was bleaker than reflected in the market. The S&P financials index <.GSPF> fell 0.5 percent."There's some hesitation in the stock market. Wal-Mart was cautious on the outlook. There were some comments on financials ... but the economic data, while suggesting weakness, is not suggesting an implosion," said Steve Goldman, market strategist, Weeden & Co. based in Greenwich, Connecticut.Including auto purchases, retail sales fell slightly more than economists had expected last month.The Dow Jones industrial average <.DJI> fell 36.64 points, or 0.28 percent, to 12,839.67. The Standard & Poor's 500 Index <.SPX> was down 3.09 points, or 0.22 percent, at 1,400.49, while the Nasdaq Composite Index <.IXIC> was down 4.77 points, or 0.19 percent, at 2,483.72.Federal Reserve Chairman Ben Bernanke said emergency liquidity measures have helped relieve strain in financial markets, though the recovery process remains incomplete.Retail sales, excluding autos, showed more resiliency than many analysts had expected. March retail sales were also revised higher.In other economic news, a survey released by the Philadelphia Federal Reserve showed the U.S. economy will barely grow in the second quarter after sluggish growth early in the year, while inflation is expected to rise.The National Association of Realtors said the median value of existing U.S. single-family home sales in metropolitan areas fell 7.7 percent in the first quarter from a year ago,(Additional reporting by Herbert Lash, Editing by Kenneth Barry)
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