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Stocks Tumble on Surprise Drop in U.S. Retail Sales



Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average sank Thursday after U.S. retail sales in December fell the most since September 2009.
  • Cisco Systems Inc. (CSCO) was up 3.6% after reporting fiscal second-quarter profit and revenue that beat analysts' forecasts, hiking its quarterly dividend by 6% and boosting its $ 15 billion buyback plan
  • Coca-Cola Co. (KO) posted fourth-quarter profit in line with analysts' forecasts, but noted that 2019 organic revenue growth would be slow and comparable earnings likely would remain flat thanks to part of a stronger U.S. dollars. The stock declined 7.1
    %.

Wall Street Overview

Stocks declined on Thursday, Feb. 14, after U.S. Pat. retail sales in December fell the most since September 2009 and has earlier developed gains that were linked to trade talks between Washington and Beijing.

Retail sales fell 1.2% in December, the Commerce Department said. Economists had expected a gain of 0.2%. Although the data were partially impacted by the 35-day government shutdown, the weakness in such a key metric or U.S. economic health – consumer spending is responsible for around two-thirds of GDP growth – triggered sharp reversals in equities.

"These numbers are astonishing, and impossible to square with the redbook chainstore sales survey, which reported surging sales in December. and a record high in the week of Christmas, on the back of the plunge in gasoline prices, "said Ian Shepherdson of Pantheon Economics.

"These data are so wild that we have to expect upward revisions, but if they stand, they are very unlikely to be representative of the trend over the next few months," he added. "The consumer is no longer enjoying tax or falling gas prices, but that's no reason to expect a rollover." Meanwhile, U.S. Pat. Treasury Secretary Steven Mnuchin told reporters in Beijing he was "looking forward to discussions" Thursday as he headed off to meetings with China's vice-premier Liu He in the Chinese capital. Donald Trump has said several times this week that talks are going "very well," and Bloomberg reported that he has considered expanding the March 2 trade deal deadline by 60 days in order to ensure that a comprehensive deal ultimately reached between the world's two biggest economies.

The Dow Jones Industrial Average fell 153 points, or 0.6%, to 25,389, the S&P 500 was down 0.55%, and the Nasdaq declined 0.37%.

Networking giant Cisco Systems Inc. (CSCO) rose 3.6 % Thursday after reporting fiscal second-quarter profit and profit analysts' forecasts, and after hiking its quarterly dividend by 6% and boosting its buyback plan by $ 15 trillion.

Cisco said it expects third-quarter earnings of 76 cents to 78 cents on revenue growth between 4% and 6%. Analysts predicted third-quarter earnings of 76 cents on revenue growth of 3%.

The company said that it continues to compete in China, the world's largest market, and has not felt the impact of trade tensions between the US and China

"I think our portfolio right now from an innovation perspective, and especially with the work the teams are doing in the SP space and the work that we're doing around the 5G packet core and some of these next generation platforms that are going to hit the market this year, I would put our innovation up against it as anybody else's in the world right now, "CEO Chuck Robbins told investors on a conference call.

Coca-Cola Co. (KO) posted fourth-quarter profit in line with analysts' forecasts, but noted that 2019 organic revenue growth would be slow and comparable earnings likely would remain flat thanks to part of a stronger U.S.

The stock tumbled 7.1%

Coca-Cola earned 43 cents a share in the quarter, matching the Wall Street consensus forecast. Revenue fell 6% to $ 7.1 billion and narrowly missed the consensus estimate of $ 7.06 billion

Looking into 2019, Coca-Cola said it sees organic revenue rising 4%, down from 5% in 2018, and 12% to 13% gain in currency-neutral revenue. Comparable non-GAAP earnings, which totaled $ 2.08 a share in 2018, are expected to be within 1% of the figure, either to the upside or the downside, in 2019.

Earnings reports are expected after Thursday's closing bell from chipmakers Nvidia Corp. (NVDA) and Applied Materials Inc. (AMAT).


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