On the last full day’s trading before the Christmas holiday, US stocks ended lower on Thursday as markets began to wind down.
The S&P 500 market bellwether ended down 0.2% at 2260 and led by Red Hat Inc (NYSE:RHT) down 13.9% at $68.71 on a poor revenue outlook, followed by Bed Bath & Beyond (NASDAQ:BBBY) down 9.2% at $41.36.
The Dow Jones Industrial Average seemed to give up the ghost of challenging a new record peak of 20,000 and spent the whole session lower, ending down 0.1% at 19,918 led south by retailers.
The biggest Dow faller was Wal-Mart Stores (WMT) down 2.3% to $69.59. Wal-Mart issued an update on its full year 2017 earnings guidance, offering earnings per share guidance of $4.20-4.35 for the period, compared with the Thomson Reuters consensus estimate of $4.33.
Meanwhile, Home Depot Inc (NYSE:HD) was second, down 1.1% to $135.43, after New Mexico Educational Retirement Board lowered its stake in Home Depot by 13.2% during the third quarter, according to its most recent disclosure with the SEC.
Elsewhere, Finland’s Nokia broadened its legal challenge to Apple (NASADSQ:AAPL) by adding intellectual-property lawsuits in the UK, Hong Kong, Japan and Europe, after the two tech companies reignited their patent battle this week.
Apple shares closed down 0.7% at $116.22 on Thursday.
Barclays (NYSE:BCS, LON: BARC) has become the latest financial institution to face the wrath of the US Department of Justice which on Thursday filed a lawsuit in New York’s federal court that accuses the bank of deceiving investors about the quality of loans backing tens of billions of dollars of residential mortgage-backed securities in the lead-up to the so-called subprime mortgage financial crisis.
Barclays ADRs, which spent the entire Wall Street session lower, ended down 1.8% at $11.07 on Thursday.
The S&P Midcap 400 closed down 0.6% at 1669 and led by Dick's Sporting Goods Inc (NYSE:DKS), down 7.8% to $52.85, while the S&P Smallcap 600 finished down 1% at 840 and led by Tidewater Inc (NYSE:TDW), down 12.9% to £3.70, which was also the second-biggest decliner on the Russell 2000.
The wider small-cap Russell 2000 ended down 0.9% at 1362 and led by OvaScience (NASDAQ:OVAS) plunged 54.9% at $1.34 after the Waltham biotech company, which develops fertility treatments, said it would cut its nearly 100-person workforce by about 30% following the abrupt departure of two top executives.
The restructuring is aimed at allowing five-year-old OvaScience to stretch its cash into next year as the company scales back the rollout of its Augment treatment, limiting OvaScience’s revenue ramp-up. Augment is available at some clinics in Canada, Japan, and four other countries, but it has yet to be approved in the United States and most European countries.
Early trading
US stocks opened lower on Thursday as corporate news gave little festive cheer while earlier euphoria this week about the Dow Jones Industrial Average scaling a record 20,000 level faded.
The Dow was down 0.1% to 19,925.
The S&P 500 was down 0.2% at 2261 and led by Red Hat Inc (NYSE:RHT) down 12.5% to $69.80. Despite encouraging third quarter results overnight, shares of the Linux and open-source distributor plunged in after-market trading Wednesday, as the news of the resignation of Chief Financial Officer Frank Calderoni and a downbeat revenue outlook for fiscal 2017 did not digest well with investors.
Meanwhile, the S&P Midcap 400 was down 0.3% at 1674 and led by Genworth Financial Inc (NYSE:GNW) down 4.3% to $4.05 after the stock’s bonds endured a 1.7% decline and BTIG Research reiterated a hold on a stock that had reduced ratings recently from some brokers.
The S&P Smallcap 600 was down 0.2% at 847 and led by defense equipment maker AAR Corp (AIR) down 8.6% to $34.34 after poor second quarter earnings.
Another decliner among small caps was Fred's Inc (NASDAQ:FRED). The stock had rocketed earlier this week after it agreed to buy Rite Aid stores as part of Walgreens Boots Alliance (NASDAQ:WBA) efforts to sweeten its regulatory approval for a takeover of Rite Aid. Walgreens was down 1.6% at $84.52.
Meanwhile, drugstore chain Rite Aid (NYSE:RAD) itself reported adjusted quarterly earnings of 2 cents per share, half of what analysts had expected. Rite Aid's revenue also fell short, although the company said its performance was solid amid a difficult environment created by the extended process involving its deal to be bought by Walgreens. Rite Aid shares were down 0.4% at $8.44.
Early trading
US shares are expected to open little changed on Thursday on the last full day’s trading before the holiday season, after a mixed bag of official data was released.
The S&P 500 market bellwether is expected to be flat while the Dow Jones Industrial Average might add 4 points – not nearly enough momentum to drive it up to 20,000. That’s a record level it has tried repeatedly to hit this week.
Rising economic growth may have been the spur that led the Federal Reserve to hike rates this month and to promise more to come in 2017, but data out this session leaves a confused assessment for policymakers to pore over.
The key GDP rate for the third quarter – which the Fed focused upon – was revised to a final 3.5% rise quarter-on-quarter and ahead of economists’ expectations for 3.3%.
However, weekly initial jobless claims were higher than forecast, at 275,000 versus a forecast 256,000 and 254,000 a week earlier, while durable goods orders are still falling, to the tune of 4.6% in November versus a forecast fall of 4.7%. Hardly the stuff of which decisions to invest are made of.
Meanwhile, the Chicago Fed National Activity Index for November was recorded at minus 0.27 versus a forecast of minus 0.15 and October’s minus 0.05.
After an initial wobble overnight, Finnish tech stock Nokia’s (NYSE:NOK) ADRs are up 0.2% at $4.77 pre-market after the company signalled it is suing Apple (NASDAQ:AAPL) for patent infringement. The company said Apple used 32 of its patents without permission covering technologies such as software and video coding. Apple shares were down 0.1% at $116.96 before the opening bell.
Shares in Swiss biotechnology firm Actelion saw its shares surge by 5% in Zurich after the company announced it is back in exclusive takeover talks with Johnson & Johnson (NYSE:JNJ). J&J shares were down 0.03% at $115.28 pre-market.
J&J recently ditched plans to buy the company, and Actelion began talks with another suitor. But now the pair have reunited.
Shares in Rite Aid Corp (NYSE:RAD) the company in merger talks with Walgreens Boots Alliance Inc. (NASDAQ:WBA) were down 0.5% at $8.43 after earnings fell below estimates in the latest quarter as pharmacy reimbursement-rate pressure and generic drugs dragged the top line to an unexpected decline. On Tuesday Walgreens agreed to dispose of more than 800 Rite Aid stores to rival pharmacy chain Fred’s Inc (NASDAQ:FRED) to sweeten the deal with regulators.