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Lone Ranger saddles Disney; stocks fall

Tuesday, August 06, 2013 - 01:50

Aug. 6 - Summary: Disney after-the-bell results mixed as Lone Ranger leads to sales disappointment; Michael Kors hits high as sales remain strong; IBM slumps on downgrade; Stocks fall as Fed concerns remain. Conway G. Gittens reports.

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For the second day in a row Federal Reserve officials hint the central bank could start slowing stimulus as early as next month. That did not sit well with investors who drove stocks lower across the board. Iron Man 3 is a summer blockbuster hit for Walt Disney, but box office returns were not super enough to beat out the Avengers release last summer. Also, a disappointing performance for the Lone Ranger - leading to lower than expected quarterly revenues. Excluding special items, company-wide profits still manage to top forecasts. The others earnings story of the day - Michael Kors. Profits nearly doubled, sales surged 54 percent. Demand for its so-called affordable luxury merchandise gaining traction in Europe and a move to sell more in department stores is paying off. Shares hit their highest since going public more than a year a half ago. But a much different story at American Eagle Outfitters given a profit warning the day before. The mixed retail picture suggests consumers are still spending discriminately, says Michael Londrigan of fashion business college LIM. SOUNDBITE: MICHAEL LONDRIGAN, DEAN OF ACADEMIC AFFAIRS, LIM COLLEGE (ENGLISH) SAYING: "I would say last minute is a definite approach that a lot of consumers are taking. Wait for payday. Go spend our money and as close to that possible event, be it back-to-school or holiday, that's when we are going to spend our money." American Eagle slumped to a 16-month low, dragging down other merchandise retailers on similar concerns. IBM was another weak spot. Credit Suisse cast doubt on the tech giant's earnings potential -downgrading the stock. Shares of IBM fell more than 2 percent. On the economic front, the U.S. trade gap narrowed significantly in June, which could prompt an upward revision to second-quarter growth figures. European shares ended lower with financial shares battered for a second consecutive session.

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Lone Ranger saddles Disney; stocks fall

Tuesday, August 06, 2013 - 01:50