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US stocks dip on data, weak retail earnings

Mar 03 2016 19:42

New York - Wall Street stocks dropped early Thursday, as US data showed a modestly slowing service-sector activity and Costco and Kroger reported disappointing sales.

About 45 minutes into trade, the Dow Jones Industrial Average stood at 16 839.50, down 59.82 points (0.35%).

The broad-based S&P 500 lost 7.89 (0.40%) at 1 978.56, while the tech-rich Nasdaq Composite Index shed 19.18 (0.41%) at 4 684.24.

The Institute for Supply Management index for service-sector activity came in at 53.4 in February, down 0.1 from January, but well above the 50 level that separates growth versus contraction.

Commerce Department data showed US industrial orders rose 1.6% in January, below the 2.0% growth expected by analysts.

Big-box retailer Costco Wholesale dropped 3.2% after reporting that second-quarter net income fell 8.7% to $546m. Revenues were $28.2bn, below the analyst forecast for $28.4bn.

Supermarket chain Kroger tumbled 7.3% after reporting second-quarter revenues of $26.2bn, below $26.3bn analyst estimate. Earnings rose 7.9% to $559m.

Some other retail stocks were also weak. Dow member Wal-Mart Stores shed 1.4 percent, while big-box store Target fell 2.9%. But Home Depot rose 1.0%.

Nutrition supplement marketer Herbalife sank 7.4% after disclosing that it overstated membership figures.

Investors are looking ahead to Friday's US jobs report, expected to show the US economy added 190 000 jobs in February and the unemployment rate held steady at 4.9%.

The Labour Department reported Thursday that initial jobless claims rose by 6 000 to 278 000 in the week ending February 27, but claims, a sign of the pace of layoffs, remained low.

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