May 19, 2024

Stocks Close Lower on Wall Street

The retailers Gap Inc. and Aeropostale each lost more than 14 percent after cutting their profit forecasts for the year, in part because of higher costs for raw materials. Gap’s sales have been sluggish, a worrying sign for investors who are counting on shoppers to lead a recovery in consumer spending.

Gap’s results pushed down other clothing companies who have been hit hard by the rising price of cotton and shoppers who are reluctant to splurge. Polo Ralph Lauren and J.C. Penney each dropped nearly 4 percent, while Urban Outfitters fell nearly 3 percent.

At the close, the Dow Jones industrial average was down 93.28 points, or 0.7 percent, to 12,512.04.

The Standard Poor’s 500-stock index fell 10.33, or 0.8 percent, to 1,333.27. The Nasdaq composite fell 19.99, or 0.7 percent, to 2,803.32.

One exception to the gloom among retailers was Barnes Noble. The bookseller jumped 30 percent after Liberty Media offered to buy the company for $1 billion in cash.

A stronger dollar has also hurt stocks. The dollar rose against the euro after the Fitch ratings agency downgraded Greece’s debt three notches further into junk status, escalating worries about the European debt crisis.

In recent months, markets have fallen when the dollar rises against the euro because the stronger American currency has signaled that European countries are still struggling to get their debt under control.

“A stronger dollar and a stronger U.S. market can coincide, but not when the U.S. economic data are weak,” said Quincy Krosby, chief market strategist for Prudential Financial. “This has been a stronger dollar that has come because of another currency weakening, not a stronger U.S. economy.”

Concerns about the strength of the economy pushed government bond prices higher as investors sought out safer assets. The yield on the benchmark 10-year Treasury note fell to 3.15 percent from 3.18 percent late Thursday. Bond yields fall when their prices rise.

Oil prices settled at $99.49, up $1.05, after trading lower most of the day on new signs that demand for gasoline is falling. Even as most energy stocks fell, Anadarko Petroleum jumped 5 percent on hopes that the company would owe less than expected to the oil giant BP for its part in the Deepwater Horizon disaster.

BP said it would receive a $1 billion payment from Moex, which owned a 10 percent stake in the Macondo oil well in the Gulf of Mexico. The settlement was for a smaller amount than Moex investors feared, and suggested that Anadarko, which owned 25 percent of the well, would also pay less to BP.

BP’s stock rose more than 2 percent on expectations that other companies will share costs related to the Gulf of Mexico oil spill.

There were two notable exceptions to the downward trend. The software company rose more than 10 percent after its first-quarter profit beat expectations. The social networking and job search site LinkedIn added to Thursday’s gains, when it more than doubled in its stock market debut. The company rose 2 percent.

In Europe, shares moved lower late in the session. The FTSE 100 index of leading British shares ended 0.1 percent lower, while Germany’s DAX was off 1.2 percent. The CAC 40 in France was down 0.9 percent.

The euro slid to $1.4197 from $1.4311 late Thursday.

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