US markets slid on Thursday as tensions between the US and North Korea remain on the boil. North Korea threatened in a detailed outline to create 'historic enveloping fire" by firing missiles in the waters off Guam.
Continuing tensions between the US and North Korea plagued the US stock market rattling investors and sparking a pull back. The normally quiet month of August is low on volume but ramped up by volatility as investors also absorb deflating economic data and a few disappointing earnings reports.
- Dow 21,865 -0.83%
- S&P 500 2,439 -1.38%
- Nasdaq 6,221 -2.06%
- Russell 2000 1,374 -1.59%
- NYSE Composite 11,788 -1.18%
- Gold 1,291 +0.98%
- Oil WTI $48 -2.20%
- 10-Year Treasury Yield 2.20% -0.03%
VIX fear gauge fires up
Sharp pull backs defined the indexes in today's trading. The plunged -204 points or -0.83% to close at 21,865. Nasdaq fell -135 points or -2.13% and the S&P 500 slid -35 points or -1.45%. Blue Apron fell -17.63% after a greater-than-expected loss of $31.6m or 47 cents per share. FactSet analysts according to the Dow Jones Newswires expected a 27 cents per share loss.
Market commentary has made much of the Chicago Board Options Exchange (CBOE) fear index or fear gauge (VIX Index) which indicates investor sentiment and volalitilty.
The VIX is up +4.84% (+44.73%) has remained at all-time lows since the US election and a spike since the start of the week of 30% to 14. This figure is still off from its average of 20 but the increase is a significant tell of increasing investor nervousness and the possibility of a marked correction.
Retailers in the doldrums
Macy's stock price slumped -10.25% and its pain was shared by other retailers who were also down such as Kohl's (-5.80%), Dillards (-15.87%), JC Penny (-8.72%) and Sears (-6.42%). What sent investors for the exits was Macy's earnings report (which often acts as a barometer for the sector) showing weak sales figures according to Zack's.
Macy's posted revenue of $5.55bn which beat consensus estimates of $5.5bn. EPS of 48 cents per share also beat estimates of 45 cents a share.
Although the decline in sales was slowed and Macy's point to improved business in the second quarter, investors weren't buying it and the retail sector spasmed. Macy's same store sales fell 2.8% for the quarter.
Kohl's and Dillard's also reporting second quarter earnings on Thursday experienced a decline in same store sales. Kohl's like Macy's did beat estimates for earnings and revenues while Dillards delivered a loss of 58 cents per share as a result of deep discounting to shed inventory. The company delivered revenue of $1.46bn which beat expectations of $1.42bn. Same store sales were down 1% year over year.