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US stocks struggle for direction as Macy’s, Lowe’s shine, tech cuts losses


US stocks fall on tech weakness, but Macy’s, Lowe’s lead retailers higher By Investing.com

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AuthorYasin EbrahimStock Markets

Published Feb 26, 2024 07:26PM ET
Updated Feb 27, 2024 01:45PM ET

Investing.com– U.S. stocks slipped Tuesday, pressured by weakness in tech, but losses were kept in check by rise in retailers following better-than-expected quarterly results from Macy’s and Lowe’s. 

By 13:38 ET (18:38 GMT), the Dow Jones Industrial Average fell 160 points, or 0.4%, S&P 500 fell 0.1%, while NASDAQ Composite was flat.

Macy’s, Lowe’s lead retailers higher after earnings beat

Lowe’s (NYSE:LOW) started the ball rolling earlier Tuesday, reported fourth-quarter net sales that topped Wall Street estimates despite an ongoing slowdown in spending on home improvement projects. Its stock rose nearly 2%.

Macy’s (NYSE:M) stock rose 4% after the Bloomingdale’s owner unveiled strategy overhaul aimed at creating a “more modern” business, as it has been struggling with weak demand as shoppers, squeezed by high inflation and elevated interest rates, pull back spending on discretionary items.

The duo of reports come amid a busy week for quarterly earnings from retailers including TJX Companies (NYSE:TJX) and Best Buy (NYSE:BBY) set to release quarterly earnings this week.

Consumer showing signs of trouble; Fed speakers continue to urge caution on rate cuts

Consumer confidence unexpectedly fell to 106.7 in February from 106.7 the prior month, marking a three-month low, as the impact of inflation continue to weigh on consumers. 

“Similar to businesses curtailing investment amid a still positive but uncertain outlook for the economy as well as monetary and fiscal policy, consumers are growing less confident, Stifel said in a note. 

Durable goods orders, meanwhile, fell more than expected in January amid a sharp drop in bookings for commercial aircraft, falling 6.1% last month.

The duo of reports come a Fed officials continue to urge caution on cutting rates too soon. 

“With inflation running above target, labor markets tight and demand showing considerable momentum, my own view is that there is no need to preemptively adjust the stance of policy,” Kansas City Federal Reserve Bank President Jeffrey Schmid said in his first extensive public remarks on Monday since he began the job last August. 

Zoom a bright spot for tech; Unity Software, Workday guidance fall short

Zoom (NASDAQ:ZM) rose 6% after reporting stronger-than-expected earnings, while also announcing a $1.5 billion share buyback The video conferencing firm’s “guidance for an acceleration in 2H [second half of the year] as well as a new $1.5 billion buyback to offset dilution and that might lower the risk of large-scale M&A,” UBS said in a note. 

Unity Software (NYSE:U) sank 8% after the videogame software maker reported weaker-than-expected guidance amid turnaround plan that includes exiting some businesses.

Workday (NASDAQ:WDAY) fell 3% after keeping its subscription sales guidance unchanged despite the top line beat as “operating margin expansion is expected to slow in FY25 owing to significantly higher net new Opex to support durable growth,” Oppenheimer said in a note.

Energy stocks slip despite oil gains amid fresh hopes for extended OPEC+ cuts 

Energy stock slipped, weighed down by weakness in Hess Corporation (NYSE:HES), Chevron Corp (NYSE:CVX), and Phillips 66 (NYSE:PSX) even as oil prices climbed following a Reuters report that the OPEC and its allies, or OPEC+, are considering extending voluntary oil output cuts into Q2.

In November last year, OPEC+ agreed to voluntary cuts totalling about 2.2 million barrels per day for the first quarter this year, though dealmaking between members was fraught with disagreement over output limits.  

(Peter Nurse Ambar Warrick contributed to this article.)

US stocks fall on tech weakness, but Macy’s, Lowe’s lead retailers higher

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