US stocks were at session lows with the main indexes trading down amidst swirling White House controversy and rumours that White House economic adviser Gary Cohn would resign.
- Trump's pro-business agenda looks shaky
- White House confirms Cohn to remain in role
- Fear index climbs
- Terrorist attack in Spain weighs
The stock market was still reverberating after President Trump's press conference on Tuesday and the disbanding of two business councils on Wednesday. A number of CEOs distanced themselves from the President and condemned his response to white supremacist violence over the weekend.
Late breaking news of a terrorist attack in Barcelona that left 13 dead and at least 50 injured also weighed on the market. In an across-the-board declines and lowest session since last Thursday when North Korea tensions sent markets tumbling. The Dow fell -1.24%, the S&P 500 dropped -1.54% and Nasdaq -1.94%.
- Dow 21,750 -1.24%
- S&P 500 2,430 -1.54%
- Nasdaq 6,232 -1.94%
- Russell 2000 1,3604 -1.67%
- NYSE Composite 11,721 -1.24%
- Gold 1,294 +0.88%
- Oil WTI $47 +0.53%
- 10-Year Treasury Yield 2.18% -0.03%
Investor focus on Trump's pro-business policies
Cohn was also reported in a number of media including the New York Times to have "told people around him that he was offended, as a Jew and as an American, by the president’s reaction to the violence in Charlottesville."
Investors worry about the ability of the White House to pass stimulus policies. Retail in a turnaround from Wednesday and technology led the decliners. The CBOE Volatility Index, the standard measure of investor anxiety, climbed 2 points or 23% to 14.65. On Wednesday the fear gauge was around 11.
What a drag...weak earnings
A raft of earnings disappointments dragged on indexes' performance led by retail sector which rebounded yesterday only to give way under L Brand, Victoria Secret's parent company and WalMart earnings announcements.
L Brand met analysts' expectations but fell -4.72% after it cut its full-year view. Adjusted second quarter earnings per share decreased 31% to 48 cents compared to 70 cents last year, and adjusted net income was $138m compared to $204m last year. Comparable sales decreased 8% for the second quarter.
The second quarter comparable sales was below company expectations and the retailer adjusted guidance for the remainder of the year 2017 with full-year earnings per share to $3.00 and $3.20 from its previous guidance from $3.10 to $3.40.
WalMart's competitive strategy was to improve its stores, invest in growing its online presence and in bringing down prices all of which increased its operating costs 3.9%. Sales at US stores rose 1.8% which is the 12th consecutive increase, its online sales surged 60% as the retailer snapped up a number of e-commerce sites.
The company earned 96 cents per share compared with $1.21 over the same period last year. Revenue grew 2.1% to $123bn. WalMart fell -1.65%. NetApp also fell -6.11% despite beating earnings. Analysts sounded a cautious note on the company's competition and comparisons going forward.