The Dow Jones industrial average and the S&P 500 posted early 0.3% declines. The Nasdaq dipped 0.1%. Small caps led the early losses, with the Russell 2000 starting down 0.6%.
Amazon Discount Hits Wal-Mart; Thor, G-III Score Early Wins
Wal-Mart (WMT) dropped 01.2%, diving to the bottom of the Dow industrials, possibly hurt by Amazon.com’s (AMZN) announcement that it would reduce its Prime membership fees for several low-income consumer groups in a bid to more directly compete with Wal-Mart. Amazon said it would cut its Prime membership fee from $10.99 to $5.99 for persons receiving government assistance in the form of food-stamp cards. The discount would affect about 20% of the U.S. population, according to Amazon. Amazon shares dipped 0.2%.
Thor Industries hitched up an 10% gain after reporting fiscal third-quarter earnings of $2.11 a share vs. consensus estimates for $1.86. Revenue surged 57%, well above analysts’ targets. The company reported steadily rising demand, and said capacity expansions underway at nearly every Thor subsidiary would begin contributing to results in the fourth quarter. The gain lifted shares up the right side of a three-month consolidation.
RV-making peer Winnebago (WGO) felt some updraft from Thor’s report, rising 3% in early trade.
Retail and apparel stocks were active after a burst of early reports.
G-III Apparel Group hurtled ahead 24% at the opening bell. The maker of Levi, Guess and Kenneth Cole brands turned in a 19-cent per-share gain for the first quarter vs. expectations for a 40-cent per-share loss. A 16% revenue gain clobbered analyst estimates and management projected higher revenue and a narrower loss than consensus views in the second quarter. The gain sent the stock back above both its 10- and 40-week moving averages. Shares have been in a steep decline for 20 months.
Conn’s (CONN) crumbled 8% after reporting a first-quarter loss that was narrower than forecast. Revenue declined in line with analyst targets, with a 15% drop in same-store-sales, and the company guided to a 12%-15% drop in the second quarter. The stock ended Monday up 143% from a March low.
Industrial distribution giant HD Supply (HD) tumbled 15% in opening trade, after reporting weaker-than-expected first-quarter earnings and announcing it would sell its waterworks division to private equity firm Clayton, Dubilier & Rice for $2.5 billion. The stock has been consolidating since February.
Bonds Climb, Dollar Slides; April JOLTS On Tap
Crude oil eased a fraction, West Texas Intermediate crude dipped 0.2% holding above $47 a barrel. Gold jumped almost 1% to $1,294 an ounce. Copper slipped more than 1%. The dollar slumped sharply vs. the yen, and traded down vs. the euro. Bonds jumped, trimming the the 10-year yield by 5 basis points to to 2.14%.
The Labor Department is expected to reported its Job Openings and Labor Turnover Survey for April at 10 a.m. ET.
Overseas, Tokyo’s Nikkei 225 dropped 1% Tuesday, hurt by a stronger yen and closing back below the 20,000 level. In China, Hong Kong’s Hang Seng Index closed up 0.5% after briefly topping the 26,000 level for the first time in 24 months. The Shanghai Composite added 0.3%.
In Europe, stocks were under pressure at midday. Frankfurt’s DAX, down hardest, fell 1%.