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Market Update

Weak Tech Stocks Lead Nasdaq Lower, U.S. Housing Starts at 8-Year High


Author: Nichole Harper
ticker.com
Last Update: 3:29 PM ET August 18 2015

3:20 PM New York City, New York Market indexes on Wall Street traded lower and tech stocks led the decliners. Housing starts increased to a near eight-year high but permits fell. Home Depot and TJX Companies rose on earnings but Wal-Mart eased after the retailer lowered annual earnings outlook.

Market indexes on Wall Street traded lower and tech stocks led the decliners.

Housing starts increased to a near 8-year high as builders take advantage of improving labor markets and low interest rate environment but new permits declined.

U.S. housing starts in July rose 0.2% to 1,206,000 annual rate from the revised June estimate but surged 10.1% from a year ago month.

Housing permits in July soared 16.3% from the revised June rate and jumped 7.5% from a year ago month rate to 1,041,000, the Department of Commerce said.

On Wall Street, Tollbooth Strategy Index edged down 2.09 to 10,923.81.

S&P 500 index fell 7.12 or 0.3% to 2,095.61 and the Nasdaq Composite Index slid 27.99 or 0.5% to 5,064.06.

Crude oil in New York rose 34 cents to $42.21 a barrel and gold fell $2.60 to $1,115.80 an ounce.

U.S. Movers

Home Depot Inc (HD) jumped 2.2% or $2.58 to $122.34 after the home improvement retailer reported net sales in the second-quarter ending on August 2 increased 4.5% to $24.83 billion from a year ago period.

Comparable store sales in the quarter jumped 4.2% comparable sales for U.S. stores soared 5.7%.

Net income in the quarter rose 4.8% to $2.2 billion or $1.73 per diluted share compared to $2.1 billion or $1.52 from the same quarter last year.

The company lifted earnings per share forecast for the year to increase in a range of 13% to 14% to $5.31 to $5.36 from fiscal 2014.

TJX Companies Inc (TJX) soared 5.9% or $4.23 to $75.84 after the off-price retailer reported total sales in the second-quarter ending on August 1 jumped 6% to $7.4 billion from a year ago period.

Comparable store sales in the quarter increased 6%.

Net income in the quarter soared 7% to $549.3 million or 80 cents per diluted share compared to $517.6 million or 73 cents from the same quarter last year.

For the third quarter, TJX diluted earnings per share in the range of 80 cents to 82 cents compared to 85 cents in a year ago period.

For the year, the retailer estimated diluted earnings per share to be in the range of $3.24 to $3.28 versus $3.15 in a year ago earlier.

Wal-Mart Stores, Inc (WMT) dropped 2.9% or $2.12 to $69.79 after the low price retailer reported total revenues in the second-quarter ending in July edged up 0.1% to $120.23 billion from a year ago period.

Comparable store sales in the quarter rose 1.5%.

Net income in the quarter declined 15.1% to $3.48 billion or $1.08 cents per diluted share compared to $4.09 billion or $1.26 from the same quarter last year.

Wal-Mart U.S. saw net sales jumped 4.8% to $73.96 billion while Sam''s Club net sales slipped 0.9% to $14.73 billion and comparable store sales increasing 1.3%. Net sales in the international segment declined 9.6% to $30.64 billion.

The retailer forecasted earnings per share for the third-quarter in the range of 93 cents to $1.05 per share.

For the year, Wal-Mart lowered its earnings per share estimate between $4.40 and $4.70 from earlier guidance between $4.70 and $5.05 per share.

European Markets

UK producer prices index for all manufactured products dropped 1.6% in July and unchanged since May.

Between June and July output price fell 0.1% and unchanged from June. In July, total input prices index declined 12.4% from 13.1% in June, the Office for National Statistics said.

Separately, the department said UK annual inflation measured at consumer prices rose 0.1% in July from break even in June.

The department reported U.K. home prices in June jumped 5.7% from 5.6% increase in May. On a seasonally adjusted basis, average home prices between May and June rose 0.4%.

In London trading, FTSE 100 index slipped 22.41 or 0.4% to 6,526.29 and in Frankfurt the DAX index fell 20.46 or 0.2% to 10,917.

In Paris, CAC 40 index slid 6.41 to 4,978.85.

Persimmon Plc dropped 2.1% to 2,077 pence after the U.K.-based home-builder reported revenues in the first-half ending in June jumped 11% to 1.33 billion from 1.20 billion in a year ago period.

Net profit in the period surged 45.2% from a year ago to 237 million compared to 163.2 million and diluted earnings per share jumped to 75.6 pence from 53.4 pence.

Wirecard AG soared 8% to 38.86 after the Germany-based electronic payment services provider reported revenues in the second-quarter ending in June surged 26.7% to 180.67 million from 142.59 million a year ago period.

Net profit in the quarter soared 26.6% from a year ago to 32.35 million compared to 23.72 million and diluted earnings per share increased to 0.26 from 0.19.

Asian Markets

Nikkei in Tokyo traded lower after weak sentiment and poor market conditions in Shanghai trading. Fast Retailing and SoftBank Group led the decliners among large companies in Tokyo. GDP in the previous quarter dropped 1.6%, meeting expectations.

Market indexes in Tokyo struggled and the Nikkei average closed lower in lacklustre trading as investors focused on latest batch of earnings.

The Nikkei 225 Stock Average fell 65.79 or 0.3% to 20,554.47 and the broader Topix index slid 0.65 to 1,672.22.

The yen eased to 124.37 against a dollar.

Stocks in Review

Don Quijote Holdings Co Ltd slipped 1.7% to 5,200 yen after the discount stores operator reported net sales in the year ending in June soared 11.7% to 683.98 billion yen from 612.42 billion yen in a year ago period.

Net income in the period jumped 7.8% to 23.15 billion yen compared to 21.47 billion yen and diluted earnings per share increased to 146.63 yen from 136.56 yen in the same period a year ago.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc