Stock Market Today: Dow, S&P 500 Hit By Struggling Financial Stocks, Dick's Earnings
The athletic apparel retailer missed estimates for the first time in years as shoplifting spiked.
Stocks opened cautiously higher Tuesday but lost steam as the session wore on. Investors are on tenterhooks ahead of Federal Reserve Chair Jerome Powell's Friday speech in Jackson Hole, Wyoming.
Ahead of this key event, market participants took in a mixed batch of retail earnings, which did little to lift sentiment.
The Federal Reserve's annual economic symposium in Jackson Hole kicks off this Thursday, with Fed Chair Powell slated to speak mid-morning Friday. Powell's speech last year in Jackson Hole sparked a broad-market selloff, so the event certainly has the potential to create volatility.
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Deutsche Bank economists expect Powell to "broadly stick to the message that there remains a way to go on inflation and that fully restoring price stability will likely require some softening in labor market conditions."
Lowe's, Dick's Sporting Goods report earnings
On the earnings front, Lowe's Companies (LOW) jumped 3.8% after the home improvement retailer reported a narrower-than-expected decline in Q2 same-store sales. LOW also beat on the bottom line, while revenue of $25 billion matched estimates.
Dick's Sporting Goods (DKS), on the other hand, slumped 24.2% after the athletic apparel retailer reported lower-than-expected second-quarter earnings of $2.82 per share. Revenue of $3.224 billion also fell short. This was DKS' first top- and bottom-line miss since 2020. The company cited "elevated inventory shrink," specifically shoplifting, as a main reason for its results.
"Organized retail crime, and theft in general, is an increasingly serious issue impacting many retailers," Dick's CEO Lauren Hobart said on the company's earnings call.
Arm files paperwork for highly anticipated IPO
Meanwhile, several semiconductor stocks, including Advanced Micro Devices (AMD, -2.4%) and Qualcomm (QCOM, -1.1%), fell following news that U.K. chip designer Arm filed paperwork for its initial public offering (IPO). The company designs chips used in smartphones and consumer electronics and is backed by Japan's SoftBank Group. It was also once a takeover target for Nvidia (NVDA, -2.8%), though those plans fell through on regulatory concerns.
Arm is expected to go public next month in what is undoubtedly one of the most-anticipated upcoming IPOs in years. The stock will be traded on the Nasdaq Stock Exchange under the ticker "ARM."
As for the major indexes, the S&P 500 (-0.3% to 4,387) and the Dow Jones Industrial Average (-0.5% at 34,288) suffered modest losses as financial stocks sold off. Indeed, financials were the worst-performing of the 11 S&P 500 sectors. The proximate cause for the selloff was a series of downgrades to the credit ratings of several regional banks. The Nasdaq Composite managed a marginal gain to end at 13,505.
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