US STOCKS-Wall Street declines after Home Depot outlook, US retail sales

Horizon Therapeutics

16/05/2023 21:00

(Updates to market close)

        * 
      Home Depot drops after cut in annual sales forecast
    

        * 
      Capital One up as Berkshire Hathaway reveals stake
    

        * 
      Horizon, Amgen fall after FTC sues to block deal  
    

  
    By Chuck Mikolajczak
       NEW YORK, May 16 (Reuters) - 
    U.S. stock indexes closed lower 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  declined as the biggest drag on the Dow
Industrials and was 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."
    According to preliminary data, the S&P 500  .SPX  lost 26.39
points, or 0.64%, to end at 4,109.89 points, while the Nasdaq
Composite  .IXIC  lost 21.89 points, or 0.18%, to 12,343.05. The
Dow Jones Industrial Average  .DJI  fell 335.01 points, or
1.00%, to 33,013.59.
    Recent data has indicated slowing in the U.S. economy
following a string of 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 ready 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 held a new round of talks about raising the debt
ceiling. The Treasury Department has warned it could run out of
money as soon as June 1 without a deal, which would trigger a
default and likely cause a sharp economic slump.  
    Horizon Therapeutics  HZNP.O  tumbled as the Federal Trade
Commission said it would file a lawsuit to block Amgen Inc's
 AMGN.O  $27.8 billion deal to buy the company. Shares of Amgen
fell.
    The decline in both stocks weighed on the Nasdaq Biotech
Index  .NBI , with each acting as the top two drags on the
index. 
    Shares of Capital One Financial Corp  COF.N  climbed the day
after Berkshire Hathaway Inc  BRKa.N  disclosed it had taken a
stake of nearly $1 billion in the stock.

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Retail sales    https://tmsnrt.rs/3IhI7c5
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 (Reporting by Chuck Mikolajczak; Editing by David Gregorio)
 ((charles.mikolajczak@tr.com; @ChuckMik;))