1. Business

Retail slammed as Wall Street has second-worst week of the year

Published Nov. 14, 2015

NEW YORK — The U.S. stock market slumped to its second-biggest weekly loss of the year Friday, breaking a streak of six consecutive weeks of gains. Fears that the holiday shopping season will be a dud tanked retail stocks.

Retailers ranging from department stores to dollar stores plunged after Nordstrom posted disappointing third-quarter results, just as Macy's did earlier this week.

On Friday, the Dow Jones Industrial Average fell 202.83 points, or 1.2 percent, to 17,245.24. The Standard & Poor's 500 gave up 22.93 points, or 1.1 percent, to 2,023.04. The Nasdaq composite index slipped 77.20 points, or 1.5 percent, to 4,927.88. For the week, the Dow dropped 3.7 percent, the S&P 500 lost 3.6 percent and the Nasdaq fell back 4.3 percent.

The price of oil continued to slide on evidence that global supplies are still rising. The dollar could get even stronger, further pressuring oil and other commodities and affecting mining and energy companies.

Concerns about retail sales and skidding commodities prices have eroded the gains from October's big stock market rally. Stocks have now lost ground seven of the past eight days. Overall, the S&P 500 is down almost 2 percent for the year.

Nordstrom sank $9.51, or 15 percent, to $53.96 after reporting weaker sales. The company also cut its forecast for the year.

J.C. Penney's results were about equal to analyst projections, but its stock lost $1.35, or 15.4 percent, to $7.44. Video game retailer GameStop sank $7.35, or 16.5 percent, to $37.18.

Stifel Nicolaus analyst Richard Jaffe suggested the widespread selling was an overreaction. Shoppers will spend plenty of money this holiday season, he said, and while they're spending more money on smartphones and TVs and other big items than they used to, there will still be plenty of socks and sweaters given as gifts over the holidays. "There will be a lot of gift giving, a lot of apparel sales," Jaffe said.

He noted that Americans' shopping habits have changed a lot over the past few years. Consumers are spending more on homes, cars and vacations. Aging baby boomers don't buy clothes as often as they used to, and younger shoppers are more interested in technology.

The price of oil continued to fall after the International Energy Agency said commercial inventories reached a record of almost 3 billion barrels at the end of September. The IEA also said growth in global demand will slow down next year. The strong dollar makes dollar-denominated commodities costlier to buyers using yen, euro and other currencies.