US STOCKS-S&P 500, Dow fall, dragged by Home Depot outlook, US retail sales

Horizon Therapeutics

16/05/2023 19:47

(Updates to mid-afternoon, changes byline)

        * 
      Home Depot drops after cut in annual sales forecast
    

        * 
      Capital One up as Berkshire Hathaway reveals stake
    

        * 
      Horizon falls after FTC to block Amgen's deal to buy co  
    

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      Dow down 0.83%, S&P 500 down 0.41%, Nasdaq up 0.08%
    

  
    By Chuck Mikolajczak
       NEW YORK, May 16 (Reuters) - 
    The Dow and the S&P 500 retreated on Tuesday after a
disappointing forecast from Home Depot and U.S. retail sales
data for April pointed to softer consumer spending, while
uncertainty about interest rates and debt limit negotiations
weighed on sentiment.
    Home Depot  HD.N  shed 1.73%, the biggest drag on the Dow
Industrials and among the heaviest weights on the S&P 500 after
the home improvement retailer cut its annual sales forecast and
projected a steeper-than-expected decline in profit. Shares of
peer Lowe's Companies Inc  LOW.N  fell 1.38%. 
    "You can argue that people are tired of spending on the
house, they want experiences, they want to go out they want to
do other things, they don’t want to fix up the house according
to Home Depot, because they had horrendous earnings," said Ken
Polcari, managing partner at Kace Capital Advisors in Boca
Raton, Florida. 
    The Commerce Department reported retail sales rose 0.4% in
April, short of the estimate for an increase of 0.8%. But core
retail sales rebounded, a figure excluding automobiles,
gasoline, building materials and food services. 
    "There is a sense that people are starting to get a little
bit more sensitive to the Fed being successful and this ongoing
drama of the debt ceiling is causing angst."
    The Dow Jones Industrial Average  .DJI  fell 278.42 points,
or 0.83%, to 33,070.18, the S&P 500  .SPX  lost 16.85 points, or
0.41%, to 4,119.43 and the Nasdaq Composite  .IXIC  added 9.92
points, or 0.08%, to 12,375.13. The Nasdaq held slight gains, in
part due to a 5.49% jump in Advanced Micro Devices after Third
Point LLC disclosed a stake in the company. 
    Recent data has indicated slowing in the U.S. economy
following several rate hikes by the Federal Reserve to fight
high inflation,. That slowing along with recent negotiations
over the U.S. debt ceiling has focused attention on when the
central bank will pause hiking, or cut interest rates.
    While the market is currently pricing in a rate hike by the
end of the year, recent comments from Fed officials suggested
they are not willing to cut rates soon. 
    Richmond Fed President Thomas Barkin said he was
"comfortable" with raising interest rates further if needed, but
liked the "optionality" implied in the latest policy statement.
    Cleveland Fed President Loretta Mester said she does not
think the central bank can hold interest rates steady yet. 
    Lawmakers were scheduled to meet to work on a deal to raise
the U.S. government's $31.4 trillion debt ceiling, with
Democratic President Joe Biden and top congressional Republican
Kevin McCarthy expected to discuss new work requirements for
benefits programs for low-income Americans.
    Horizon Therapeutics  HZNP.O  tumbled 15.35% as the Federal
Trade Commission was expected to file a lawsuit to block Amgen
Inc's  AMGN.O  $27.8 billion deal to buy the company. Shares of
Amgen fell 1.89%.
    The Nasdaq Biotech Index  .NBI  fell 2.51% , hitting its
lowest in three weeks, on pace for its biggest daily percentage
drop in three months. 
    Shares of Capital One Financial Corp  COF.N  climbed 2.44%
the day after Berkshire Hathaway Inc  BRKa.N  disclosed it had
taken a stake of nearly $1 billion in the stock.
    Declining issues outnumbered advancing ones on the NYSE by a
3.56-to-1 ratio; on Nasdaq, a 2.04-to-1 ratio favored decliners.
    The S&P 500 posted 10 new 52-week highs and 12 new lows; the
Nasdaq Composite recorded 42 new highs and 163 new lows.

 (Reporting by Chuck Mikolajczak; Editing by David Gregorio)
 ((charles.mikolajczak@tr.com; @ChuckMik;))