U.S. stocks failed to extend their gains to third day on Tuesday. On the one hand, the turbulence around North Korea further diminished, which has helped the financial markets in the past few days. Better than expected figures on retail sales, on the other hand, put pressure on the major indexes. This may cause the Federal Reserve to increase interest rates faster.
Only Dow-Jones index managed to gain for the third consecutive session, ending the session at 21998.99 points. The broad S&P 500 saw a slight decrease of 0.05 percent to 2464.61 points, and the Nasdaq dropped 0.1 percent to 6333.01 points.
Internet retailer Amazon traded lower after news that the company wants to pick up $16 billion from investors to pay for the acquisition of Whole Foods Market supermarket group. For the first time since 2014, Amazon has put bonds into the market. The world’s largest online retailer and IT group would place bonds for $16 billion, according to Bloomberg.
The demand was so high that Amazon could even fall with the interest rate during the course of the placement. Thus, for the 40-year tranche, the company would only have to pay a premium of 1.45 percent compared to US government bonds. At the beginning of the auction Amazon had offered a premium of 1.65 percent. If the placement in the volume go over the stage, it would be the fourth largest issue of a US company this year. In the past year, only the AT & T Telecom Group (22.5 billion), British American Tobacco (17.25 billion) and Microsoft (17 billion) were paid on the issue of fixed-interest bonds.
Home Depot increased its expectations for earnings and revenue throughout the year, but investors remained unimpressed, leading the stock 3 percent lower. The home-improvement chain benefits from the ongoing recovery in the US housing market but it is offering sky-high expectations.
For now, the company is in “rarefied air, given the current retail environment,” Scot Ciccarelli, an analyst at RBC Capital Markets LLC, said in a note.
Coach Inc (down 15 percent) went down after it came out with disappointing outlook. Furthermore, the results of Dick’s Sporting Goods (down 23 percent) did not fall well. Investors are worried about the company’s expansion plans. With this, Dick’s efforts, unfortunately, could not compete with online sportswear providers.
Furthermore, Advance Auto Parts fell sharply after the company warned of difficult conditions in the auto parts market.