The stock market ended modestly lower Thursday as retail stocks received the most attention, while the Nasdaq composite and S&P 500 continued to battle for support at the 50-day moving average.
X At the close, the Dow Jones industrial average, S&P 500 and Nasdaq showed losses of 0.1%-0.2%. Small caps outperformed, with the Russell 2000 up 0.3%. Preliminary data showed volume on the NYSE and Nasdaq coming in slightly higher than Wednesday's levels.
Late Wednesday, the Federal Trade Commission cleared a merger between Amazon.com (AMZN) and Whole Foods Market (WFM), and Amazon promptly announced plans to cut prices at Whole Foods. That fueled sell-offs in food retailers like Wal-Mart (WMT), Costco (COST), Target (TGT) and Kroger (KR). Kroger fared the worst, falling 8%, while Wal-Mart, Costco and Target showed losses ranging from 2% to 5%.
Cisco Systems (CSCO), Merck (MRK) and Chevron (CVX) held up well in the Dow with gains of around 1%.
Big earnings movers in the retail sector included two heavily shorted stocks: Abercrombie & Fitch (ANF) and Guess (GES). Shares of Abercrombie surged 16% while Guess vaulted 18%.
Earnings also lifted shares of retailers Dollar Tree Stores (DLTR), Williams-Sonoma (WSM), Michaels Companies (MIK) and Burlington Stores (BURL), but all four closed near session lows after a strong start.
Friday could be an interesting session depending on what comes out of the Fed's Annual Economic Symposium in Jackson Hole, Wyo. Fed Chair Janet Yellen and European Central Bank President Mario Draghi are speaking Friday. The Fed is about to start shrinking its $4.5 trillion balance sheet after years of quantitative easing to stimulate the economy. The ECB, meanwhile, could be ready ease back on its bond purchases amid signs of economic improvement.
Among the day's gainers in the stock market today, Sodastream (SODA) gained nearly 2% to 60.39. After falling 7% below a 57.78 buy point, the stock found support at the 50-day moving average and is back near highs. Initially, Sodastream was known for its carbonation system for making soda drinks at home, but as soda has become less popular among consumers, the company's sparking water offerings are enjoying strong demand.
Finally, for a good example of what institutional selling in a stock, check out shares of Ulta Beauty (ULTA). The former leader reported earnings after the close, and slumped 9% in early after-hours trading despite beating profit estimates. Growth prospects for the retailer remain solid, but its technical picture has weakened considerably after several above-average volume weekly declines since June.
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