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Retailers rise but market sags

Tuesday, Feb 25, 2014 - 02:16

Feb. 25 - Summary: Stocks end lower as retailers fail to lift the rest of the market; Home price gains slowing, consumers brooding; Weather slow Home Depot, Macy's sales but rebound expected; Tesla snags top honor. Conway G. Gittens reports.

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Stocks drifted lower on Tuesday but the retail sector was higher thanks to optimistic outlooks. The Dow, the S&P 500 and the Nasdaq each posting modest losses. Home prices were slightly down in December, the second drop in a row, and big city year-over-year gains remained atop 13 percent, but the rate of price gains is slowing, according to the S&P/Case-Shiller Index. Meanwhile, consumers did not have anything good to say about the future of the economy in February, but were much more confident in current conditions, as seen in a survey by the Conference Board. That may bode well for consumer activity in coming months, cold weather or not. Talking about weather, Laura Rosner, U.S. economist at BNP Paribas, says it definitely took a toll on how much people were willing to shell out at the register. And that prompted BNP to lower its outlook for U.S. GDP. SOUNDBITE: LAURA ROSNER, U.S. ECONOMIST, BNP PARIBAS, (ENGLISH) SPEAKING: "So we were estimating consumer spending at 2.7 percent at an annualized rate in Q1. And, based on the weak January sales, and the fact that the disruptive weather persisted into February, we actually took that estimate from 2.7 to 2.2. What that did is essentially lower our Q4 over Q4 growth estimate for 2014 by 0.2 percent. And I'd say that's a conservative estimate." Weather hurt sales at Home Depot, but the company says sales are already bouncing back. And while winter was a problem for Macy's too, the retailer says it expects consumers to return as temperatures rise. Shares of Home Depot and Macy's both gaining ground. In other corporate news: JPMorgan Chase, the largest U.S. bank, is cutting 5,000 net jobs this year, mostly in the home loan, branch and credit-card units. The bank is also trimming its 2014 profit target. Tesla Model S is the Consumer Reports' top auto pick for 2014. Ford slipped to its lowest ranking since CEO Alan Mulally took the reins in September 2006. Shares of Tesla surging to a record high. In Europe, mining shares pulled the market down on worries about the impact of slower growth in China.

Retailers rise but market sags

Tuesday, Feb 25, 2014 - 02:16

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