The Standard & Poor’s 500 Index fell, snapping three days of gains, as Wal-Mart Stores Inc. tumbled and investors weighed economic data.
Wal-Mart slipped 2.2 percent amid the worst sales start of a month in seven years. Agilent Technologies Inc. fell 5.2 percent after cutting its full-year forecast. CBS Corp. climbed 4 percent after forecasting growth in licensing fees and an increase in its share buybacks. MeadWestvaco Corp. rallied 13 percent after Nelson Peltz’s Trian Fund Management LP took a stake in the packaging company.
The S&P 500 fell 0.1 percent to 1,519.79 at 4 p.m. in New York. The Dow Jones Industrial Average gained 8.37 points, or 0.1 percent, to 13,981.76. About 6.7 billion shares traded hands on U.S. exchanges, 9.7 percent above the three-month average, as options on stocks, equity indexes and exchange-traded products were set to expire. The market is closed Feb. 18 for Presidents Day.
Wal-Mart’s sales slowdown “is a sign that the consumer is not as ready to come back as maybe Wall Street was hoping,” Terry L. Morris, who helps oversee about $2.6 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co., said by phone. “Maybe the market is a little ahead of itself at assuming better growth than what’s actually there.”
Among economic reports, U.S. consumer confidence rose in February to a three-month high and manufacturing in the New York region unexpectedly expanded. Industrial production nationwide posted a surprise contraction in January as factories took a breather after the biggest back-to-back gain in three decades.
Group of 20 finance ministers and central bankers began talks in the Russian capital today to find some common ground on currencies, with investors seeking clarity on how comfortable they are with a sliding yen. Russia, who holds the G-20’s rotating presidency this year, wants to head off a global currency war by pushing policy makers to make stronger commitments against exchange-rate manipulation.
In the U.S., lawmakers face a deadline to agree on a deal avoiding scheduled budget cuts, a process known as sequestration. Senate Democrats unveiled a $110 billion plan yesterday to delay federal spending cuts, including tax increases Republicans already say they won’t accept. The plan would postpone the March 1 start of more than $1 trillion in cuts until 2014, replacing them with defense-spending reductions, a halt in direct payments to farmers and a tax increase imposing a minimum 30 percent rate on top earners.
“At this point, it just looks like the market may be interested in pausing and pondering,” John Stoltzfus, chief market strategist at New York-based Oppenheimer & Co., said in a telephone interview. “Perhaps even a modest downside bias while we look to the March 1 deadline in Washington.”
The S&P 500 rose 0.1 percent this week, completing a seventh straight week of gains, the longest streak since January 2011. It has climbed 6.6 percent in 2013 as U.S. lawmakers reached a budget compromise. The benchmark gauge has more than doubled since bottoming in March 2009 as the Federal Reserve conducted three rounds of bond buying to lower interest rates and boost economic growth.
The index is trading at 15 times reported earnings, according to data compiled by Bloomberg. While the multiple reached the highest level since July 2011, it’s below the six-decade average of 16.4, the data show.
Four out of the 10 groups in the S&P 500 fell today as energy and financial companies dropped the most, sinking at least 0.3 percent. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, dropped 1.6 percent to 12.46.
Wal-Mart, the world’s largest retailer, dropped $1.52 to $69.30. Sales slumped this month as payroll-tax increases hit shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News. The numbers “are a total disaster,” Jerry Murray, Wal-Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives.
Agilent slipped $2.33 to $42.25. The scientific-testing equipment company lowered its full-year sales forecast, citing a potential slowdown in government spending and demand in the cell-phone market.
Transocean Ltd. fell 5.1 percent to $56.26. Deutsche Bank AG cut the rating for the world’s largest offshore driller to sell from hold, citing an increase in out-of-service time at its fleet.
CBS advanced $1.70 to $44.64. The owner of the most-watched U.S. television network will get $500 million in cable and broadcast licensing fees this year, halfway toward its goal of $1 billion by 2017, Chief Financial Officer Joseph Ianniello said. The broadcaster added $1 billion to its budget for Class B stock repurchases this year, almost double what it had previously planned.
MeadWestvaco climbed $3.97 to $35.65 after Trian disclosed it bought 1,595,125 shares in the fourth quarter. Peltz, 70, is known for taking stakes in companies and then engaging management in efforts to increase shareholder value.
Gap Inc. climbed 4.9 percent to $32.88. The biggest U.S. specialty-apparel retailer may have hired a financial adviser after receiving interest from Japan’s Fast Retailing Co., CNBC reported, citing StreetAccount. Edie Kissko, a spokeswoman for Gap, declined to comment.
Office Depot Inc. advanced 2 percent to $4.59. The second-largest U.S. office-supply chain is in talks to sell the remaining 50 percent of its Mexican unit to Grupo Gigante SAB, said people familiar with the situation.
Burger King Worldwide Inc. rose 4.7 percent to $17.36 after posting fourth-quarter earnings and revenue that beat analysts’ estimates. The fast-food chain boosted its dividend 25 percent to 5 cents a share.
Herbalife Ltd. climbed 1.2 percent to $38.74. Carl Icahn reported a 13 percent stake in Herbalife yesterday and said he would seek talks with the nutritional supplements company. Strategic alternatives for Herbalife may include taking it private, he said in a filing with the U.S. Securities and Exchange Commission.