U.S. indices were declining across the board midday on Tuesday as falling commodity prices and disappointing retail sales results depressed stocks.
U.S. retail sales dropped 0.1% in February due to a slowdown in automotive purchases. That decline was better than the 0.2% fall analysts’ were expecting. However, January’s sales number were revised downward to a 0.4% decline from the previously estimated 0.2% rise.
Analysts at Barclays were so disappointed in the results that the firm cut its GDP growth forecast to 1.9% from 2.4%.
Falling crude prices are also doing their part to depress markets, with Brent crude futures contracts falling $0.67 to $38.86 per barrel while West Texas crude contracts are down $0.87 to $36.31 per barrel.
This is the second straight session the commodity has fallen since an impressive rally that brought prices above $40 per barrel. On Wednesday, the Energy Information Administration is expected to report that stockpiles have increased for the fifth week in a row despite falling production.
Shares of Valeant Pharmaceuticals (VRX) plummeted midday after the company slashed its 2016 revenue guidance due to slower-than-expected growth in its U.S. dermatology, gastrointestinal, and women’s health businesses. The company expects revenue to be between $11 billion and $11.2 billion vs. its previous estimate between $12.5 billion and $12.7 billion.
Avon Products (AVP) was rising after the company announced that it is cutting 2,500 jobs and moving its headquarters to Great Britain from New York. The move is expected to save the company $50 million this year and between $65 million and $70 million a year starting in 2017.
Darden Restaurants (DRI) was declining after activist investor Starboard Value cut its holdings by another 1.3 million shares, reducing its stake to 5.2%. Starboard held a 9.1% interest in Darden at the beginning of the year.
3D Systems (DDD) was also tumbling midday after analysts at J.P. Morgan downgraded the stock despite the company’s earnings beat on Tuesday. Analysts at the firm said that the 3-D printing company has limited viability.
Finally, Action Alerts PLUS holding Apple (AAPL) is rising after Morgan Stanley projected that the company will sell 56.5 million iPhone units in the quarter, driven by growth in China.
Source: The Street
