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CarMax’s Huge Earnings Miss Points to Trouble Ahead for New-Car Market

  • Third-quarter forecasts call for new-vehicle sales to increase
  • But rising prices, loan rates and falling confidence will bite
Customers shop for used vehicles at a CarMax dealership in Louisville, Kentucky.
Customers shop for used vehicles at a CarMax dealership in Louisville, Kentucky.Photographer: Luke Sharrett/Bloomberg
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New-car sales are expected to rise in the just-ending third quarter, but a deteriorating market for used vehicles  -- which sent CarMax Inc. shares tumbling Thursday -- suggests trouble ahead for automakers.

The resale market often indicates where new-car demand is headed -- and CarMax said vehicle sales dropped in the three months ended Aug. 31. Both consumers and wholesalers -- they all buy from CarMax -- pulled back, the company said.