Retail giant Wal-Mart (NYSE:WMT) had a rough day after reporting disappointing first-quarter earnings. Like many of its peers, Wal-Mart suffered a significant negative impact from rough winter weather early in the year. Wal-Mart competitor Kohl's (NYSE:KSS) also missed on earnings, sending that name down 3.4%.
As a result, the Merrill Lynch Retail HOLDRS ETF (NYSEARCA:RTH) fell 1.1% on the day, underperforming the S&P 500.
Cisco Systems (NASDAQ:CSCO) was a major gainer today, rising 6.0% to $24.18. The networking equipment maker's fiscal third-quarter earnings and revenues were well above expectations.
The bullish action in Cisco helped tech outpace the broader markets by a small margin. The Nasdaq Composite (INDEXNASDAQ:.IXIC) fell 0.8%, finishing at 4069.29.
Additionally, the recent weakness in financials momentum names continued as investors shed risk. Biotech, which led the market in 2013 and early 2014, was notably weak, with the iShares NASDAQ Biotechnology Index ETF (NASDAQ:IBB) falling 1.1% today.
There was also some negative talk from big-name investors impacting the mood. In a speech at the SkyBridge Alternatives (SALT) hedge fund conference in Las Vegas on Wednesday afternoon, David Tepper of Appaloosa Management expressed that he was very nervous on the market. His message rang loud since he gave a very bullish market outlook exactly one year ago that turned out to be right on the money.
And today at SALT, David Rubenstein of the Carlyle Group said "markets are not cheap," adding that there is "a bit of frothiness" in merger and acquisition activity.
We were also quite busy with economic data today, which as a whole was mixed.
April CPI rose 2.0% year-over-year, which was in line with forecasts. Core CPI, which excludes volatile food and energy prices, rose 1.8%, slightly above the 1.7% expected. This upward momentum in costs wasn't reflected in the recent Producer Price Index report, which implies that businesses are having trouble passing along rising input prices to consumers.
April Industrial Production fell 0.6% vs. economists' expectations for a flat reading. Capacity utilization was 78.6%, the missing consensus estimate of 79.1%.
The May Empire State Manufacturing Survey came in at 19.0, well above the 6.0 Wall Street was seeking. And the May Philadelphia Fed Business Conditions Index rose 15.4%, slightly better than expected.
The NAHB Housing Market Index fell to 45 this month, which was below estimates of 49.
And finally, initial jobless claims for last week were 297,000, well under the 320,000 consensus. Continuing claims were 2,667,000.
Tomorrow's Financial Outlook
Friday will be a fairly light day in terms of data. In US economics, we'll see the April Housing Starts and Building Permits numbers at 8:30 a.m EDT, following by the May Michigan Consumer Sentiment Index at 9:55 a.m.
There are no major companies reporting earnings Friday morning, though momentum traders will be watching Canadian Solar (NASDAQ:CSIQ).
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