US stocks down as retailers, car makers pummelled

NEW YORK (AFP) - US stocks fell Tuesday (Aug 2) on the back of disappointing auto sales and a steep drop for retailers on forecasts of poor summer sales, after a similar drop on Asian and European markets.

Automobile shares tumbled as July auto sales showed signs the industry’s boom period may be slowing. Fiat Chrysler dropped 4 per cent, Ford 4.3 per cent and General Motors 4.4 per cent.

Shares of Macy’s, Nordstrom and Kohl’s all fell 6 per cent or more following a Bloomberg News report that cited a note by Cleveland Research that pointed to slow sales this summer.

Best Buy fell 1.8 per cent, Target dropped 2.2 per cent and Wal-Mart Stores slipped 0.9 per cent.

Other factors in Tuesday’s broader market retreat included the drop in oil prices, analysts said.

The Dow Jones Industrial Average fell 0.5 per cent to 18,313.77.

The broad-based S&P 500 fell 0.6 per cent to 2,157.03, while the tech-rich Nasdaq Composite Index shed 0.9 per cent to 5,137.73.

Airlines were another weak sector as Delta Air Lines said a key benchmark of passenger revenue fell 7 per cent in July. Delta lost 7.8 per cent, American Airlines 5.9 per cent and United Continental 6.3 per cent.

Biogen shares shot up 9.4 per cent on a Wall Street Journal report that said it had drawn takeover interest from Merck and Allergan. Merck lost 0.6 per cent and Allergan 1.6 per cent.

Dow member Pfizer fell 2.5 per cent as it said it had made no decision on whether to split up the company.

CVS Health surged 4.9 per cent as it reported adjusted second-quarter earnings per share of US$1.32, two cents better than analyst expectations. The drugstore chain lifted some of its forecasts.