This Article is From May 15, 2014

Wall Street Down for Second Day; Wal-Mart, Momentum Names Weigh

Wall Street Down for Second Day; Wal-Mart, Momentum Names Weigh

Wall Street extended its losses into a second day on Thursday as weaker-than-expected earnings from Wal-Mart and a selloff in momentum stocks overshadowed positive economic reports.

Wal-Mart Stores Inc shares fell 2 per cent to $77.12 after the world's largest retailer forecast second-quarter profit below analysts' estimates. The company also reported its smallest growth in quarterly sales in nearly five years.

Kohl's Corp shares also fell 2 per cent to $53 after the specialty departmental retailer reported weaker-than-expected first-quarter earnings. The S&P retail sector index was off 1.6 per cent.

Momentum stocks were among the day's biggest decliners. The Nasdaq Biotechnology Index fell 1.8 per cent and the Global X Social Media Index lost 1.2 per cent.

Among individual stocks, Netflix fell 2.7 per cent to $342.27 and Facebook Inc was off 1.9 per cent at $58.17.

"We seem to be stuck in this trend among momentum stocks that is moving the entire market," said Rick Meckler, president of hedge fund LibertyView Capital Management in Jersey City, New Jersey.

"It's a tug of war between those who think they have fallen far enough and are interested in picking up and those who still think the trend is to go lower. It's the latter today."

Small cap stocks continued their selloff with the Russell 2000 index falling 1.8 per cent. The index is now down 10.4 per cent from its closing high on March 4. A double-digit decline is viewed by some traders as an official correction.

In macroeconomic news, new applications for US unemployment benefits hit a seven-year low last week while consumer prices recorded their largest increase in 10 months in April, pointing to a firming economy. (Read more)

But US industrial output fell at its fastest rate in more than 1-1/2 years in April as factory production slumped, tempering hopes for a big jump in economic growth after a winter slowdown.

The Dow Jones industrial average fell 140.28 points, or 0.84 per cent, to 16,473.69.

The S&P 500 lost 18.47 points, or 0.98 per cent, to 1,870.06.

The Nasdaq Composite dropped 53.002 points, or 1.29 per cent, to 4,047.625.

Shares in Cisco Systems Inc jumped 7.4 per cent to $24.50, a day after the network equipment maker posted a shallower-than-expected 5.5 per cent drop in quarterly revenue.

Copyright @ Thomson Reuters 2014