US stocks drop as retailers hit by weak consumer data

Retail stocks were hit hard on Wall Street on Friday (Apr 29) after weak consumer spending data, pulling US shares lower for a second straight session.

Traders work on the floor of the New York Stock Exchange. (Photo: REUTERS/Brendan McDermid)

NEW YORK: Retail stocks were hit hard on Wall Street on Friday (Apr 29) after weak consumer spending data, pulling US shares lower for a second straight session.

Dow member Wal-Mart, Costco, Target and Macy's each lost more than two per cent after US data showed Americans are keeping tight hold of their wallets.

The large retailers all dived after the Commerce Department reported that US consumers spent just 0.1 per cent more in March than in February, despite enjoying higher incomes.

The Dow Jones Industrial Average finished down 0.3 per cent at 17,773.64.

The broad-based S&P 500 fell 0.5 per cent to 2,065.30, while the tech-rich Nasdaq Composite Index dropped 0.6 per cent to 4,775.36.

Analysts also said investors are worried about lofty stock valuations in light of a generally lackluster earnings season and economic data.

Amazon surged 9.6 per cent after reporting a swing into profit from a year ago for the first quarter to US$513 million, racking up a fourth consecutive profitable quarter.

Other earnings standouts included Expedia, which rose 8.2 per cent; LinkedIn, up 1.9 per cent; and Monster Beverage, up 12.8 per cent.

But the market hammered most biotech stocks after Gilead Sciences reported a 17.7 per cent drop in first-quarter net income to US$3.6 billion as sales for its lucrative hepatitis C treatment Sovaldi lagged expectations.
Gilead plunged 9.1 per cent, while rivals Celgene and Biogen lost 4.3 per cent and 2.2 per cent, respectively.

But another biotech company, Medivation, rose 2.9 per cent after turning down an unsolicited US$9.3 billion bid from French pharma giant Sanofi. US shares of Sanofi, which vowed to take its hostile offer to shareholders, fell 4.1 per cent.

US oil giant ExxonMobil rose 0.4 per cent after reporting better-than-expected first-quarter earnings of US$1.8 billion. But rival Chevron fell 0.2 per cent after reporting a surprisingly big loss of US$725 million.

- AFP/ec

US stocks drop as retailers hit by weak consumer data

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