Nothing to Yell About as Stocks Slip on Consumer Angst
NEW YORK ( TheStreet) -- U.S. stocks closed lower on Tuesday after a choppy session as sluggish forecasts from Best Buy
The S&P 500 lost 0.2% to close at 1,787.87 while the Dow Jones Industrial Average dipped 0.06% to 15,967.03. The Nasdaq slid 0.44% to 3,931.55. Despite the day's dour performance, the S&P 500 has gained 25% in 2013, poised for its best year since 1997.
The OECD cut its global growth forecasts on Tuesday citing an expected slowdown in emerging market economies. The Paris-based organization lowered its global growth forecasts by 0.5 percentage points both this and next year to 2.7% and 3.6%, respectively. It also cited uncertainty around the U.S. budget and Federal Reserve stimulus timing as potential risks to the global economy.
Best Buy was the worst performer in the S&P plunging 11% to $38.68 after the electronics retailer cautioned that competition may become more promotional in the fourth quarter causing Best Buy to have to be as well. That would negatively impact the company's gross margin by 80 to 90 basis points.
Markets have turned "a general stance of fear inot a small stance of greed," Doug Evans, senior managing director at Abbot Downing, said in a phone interview from San Francisco. People are becoming more confident on better and better data in housing, U.S. domestic economy, energy and advances in technology and health sciences, Evans said.
Salesforce dropped 5% to $52.74 as Bernstein equity analysts Mark Moerdler and Emily Chan kept the stock at "underperform" on stock after the biggest maker of customer-management software forecast fourth-quarter earnings below estimates. They're concerned about slowing growth in Salesforce's core business and have low expectations for many of its initiatives, such as the Platform as a Service arm and enterprise social network, Chatter. Moerdler and Chan note that hosting costs will pressure the company's margins especially amid its acquisitions push.