Picks of the Day May 12,2017

It Could Have Been Worse…

Stocks on Wall Street traded off on Thursday, after disappointing earnings numbers from retail chains, and first and foremost, Macy’s (M) and Kohl’s (KSS), ignited a sector-wide selloff in retail stocks, prompting concern that consumers are being too tight with their wallets to spur on the economy.

The dismal performance of Macy’s over Q1 sent the stock nosediving 17%, placing a damper on the whole consumer cyclical sector (XLY), which ended off 0.59%.

Kohl’s (KSS) fell 7.86% after reporting a quarterly sales decline, JWN and JCP each falling over 7%.

Traditional, brick and mortar retailers are taking a bigger hit than anybody expected. The weak retail sector earnings reports left investors on the edge of their seat in anticipation of today’s April retail sales numbers; they hope to glean signs as to whether consumers are simply shifting their purchasing habits to the digital arena or whether they’ve cut back on their purchases altogether.

Despite a sharp decline in indexes yesterday over the first 2 trading hours, the market managed to bottom and then, recover, closing near opening levels. In summary for the day, the Dow Jones ended off 0.11%, the S&P 500 and the NASDAQ each dropping 0.22%.

The main Wall Street indexes have traded of late in a narrow trading range, breaking out as recently as Wednesday to new historic highs. The S&P 500 has since gone up against March’s resistance level; a breakup above this level would have produced enduring, albeit measured technical movement that could have carried it to the 2,640 point level. The market’s current consolidation phase enables it to absorb its overbought levels without a loss of momentum.

The stock of Snapchat (SNAP) tumbled 21.45% after the company reported a downtick in both subscriber and sales growth in its first quarter as a publicly traded company.

On the S&P 500, 16 stocks rose to new 52-week highs, 9 dipping to new yearly lows; on the NASDAQ, 92 stocks recorded new 52-week highs, 65 falling to new yearly lows.

About 6.7 billion shares changed hands on U.S. exchanges, in keeping with the average over the last 20 trading days.

Friday: Today, investors will keep their eyes peeled for key reports on April’s retail chain sales figures, along with the Consumer Price Index. All of this will be at 8:30 N.Y. time. Then, at 10:00, the University of Michigan Consumer Confidence Index and business inventory figures will be released.

Hot Stocks: JWN, ANF, CYBR, HAIN, FE

IPOs: SOI, GDI, VERI, ASV

Have a great trading day!

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