Oil price, Hewlett-Packard hurt stocks
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Tue, 13 May 2008 16:47:01 GMT |
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Reuters |
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US (Business) |
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By Cal MankowskiNEW YORK (Reuters) - Stocks fell on Tuesday, after Wal-Mart Stores Inc's outlook disappointed and the price of oil pushed further into record territory, renewing concerns about the effect of higher energy prices on consumers.Wal-Mart posted stronger-than-expected earnings but indicated results for the current quarter could have trouble hitting Wall Street's estimates as customers struggle. The retailer's outlook contrasted with data showing surprising strength in retail sales last month, excluding the hard-pressed auto sector.Hewlett-Packard shares dragged on market indexes after it struck a deal to buy Electronic Data Systems for $12.6 billion.Hewlett-Packard was the top weight on the S&P 500 and the Dow, with its shares down 6.9 percent at $43.53. Some Wall Street analysts criticized the deal, saying HP was paying a rich premium for a slow-growing business."Initially we were up on the retail sales data this morning, but we couldn't hold those gains," said Frank Lesh, futures analyst and broker at FuturePath Trading LLC in Chicago. "We have got crude oil back up and we know the fear that it is really going to impact consumer spending."The Dow Jones industrial average <.DJI> was down 61.63 points, or 0.48 percent, at 12,814.68. The Standard & Poor's 500 Index <.SPX> was down 2.08 points, or 0.15 percent, at 1,401.50. The Nasdaq Composite Index <.IXIC> was down 3.75 points, or 0.15 percent, at 2,484.74.Crude oil futures came within a whisker of $127 per barrel before retreating a bit.On the Nasdaq, shares of Apple Inc , up 1.1 percent at $190.14, helped to limit losses. Apple said its iTunes online store will begin selling HBO cable network shows.Including auto purchases, retail sales fell slightly more than expected last month. Excluding autos, retail sales showed more resiliency than many analysts had expected. March retail sales were also revised higher.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 financial index <.GSPF> fell nearly 1 percent.In another sign that fallout from the subprime crisis has not gone away, France's biggest retail bank, Credit Agricole said it was seeking $9.1 billion in fresh capital after new write-downs at its Calyon investment bank.Federal Reserve Chairman Ben Bernanke said emergency liquidity measures have helped relieve strain in financial markets, though the recovery process remains incomplete.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.(Additonal reporting by Kristina Cooke; Editing by Jan Paschal)
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