By Joyce Yu
Philadelphia, PA–Stocks fell on Friday despite strong earnings from Foot Locker and positive signals from both the U.S. and North Korea on summit cancellation. The Dow has been largely traded in the negative territory although some loss has been recovered in the morning.
Following the announcement by President Trump to cancel the summit scheduled to be held in Singapore on June 12, North Korean official Kim Kye-gwan said Pyongyang is “willing to give the U.S. time and opportunities” to reconsider negotiations “at any time, at any format” in a statement issued Thursday. Trump said Friday that his administration has restarted dialogue with North Korea following his cancellation of a historic summit.
“We’ll see what happens. We’re talking to them now,” he told reporters as he left the White House on his way to the U.S. Naval Academy graduation.
The latest development, however, failed the bolster market sentiment which has been weighted down by a new report on U.S consumers. Consumer sentiment in the U.S. unexpectedly fell in the month of May, according to revised data released by the University of Michigan on Friday. The consumer sentiment index for May was downwardly revised to 98.0 from the preliminary reading of 98.8. Economists had expected the consumer sentiment index to be unrevised at 98.8, same as April reading.
“The May survey, however, found that consumers anticipated smaller income gains than a month or year ago, even though they anticipate the unemployment rate to stabilize at its current 18-year low,” chief economist Richard Curtin said in a statement.
“As past expansions have shown, rising interest rates do not suppress spending gains as long as they are accompanied by more substantial increases in incomes,” he added. “The May survey, however, found that consumers anticipated smaller income gains than a month or year ago.”
Stocks recover slighted after 100 points decline at open. Stocks of athletic shoe retailer soared 13% after releasing its Q1 earnings which easily beat Wall Street expectations with adjusted earnings per share of $1.45 versus expectations of $1.24 per share.
“At the end of the day, it’s going to come down to earnings and the ability of companies to beat,” Jeremy Klein, chief market strategist at FBN Securities, told CNBC. “Things are quiet ahead of the holiday … [but] there’s nothing to suggest corporate earnings in the next couple quarters will be any less impressive.”
For the week, home improvement retailer Lowe’s and High-end jeweler Tiffany & Co are top performers. Lowe’s, though missed expectations for the first quarter, maintained its annual financial targets. Its shares rose more than 10% since the earning announcement. Tiffany & Co shares jumped more than 23% after reporting that same-store sales rose 7% in the quarter, overshooting expectations of only 2.6%. It also raised its full-year guidance.