Markets closed lower on Wednesday after retail sales declined last month. The Commerce Department said there was a drop of 0.3% in consumer sales in September. The drop in sales followed a surge in sales of 10.4% in August. The decline in September was partially attributed to a 0.8% drop in auto sales and a 1.2% drop in clothing and accessories sales. There was growth of 3.4% in sales of electronics, which could have been boosted by sales of the Apple iPhone 6. In the past year, retail sales are up 4.3%. The next batch of reporting analysts are looking towards is the holiday shopping season. Chris Christopher, director of U.S. consumer economics at IHS Global Insight, says he believes that the holiday shopping season will be “consistent” with last year. “We think general merchandise (and) discount stores are going to do well this Christmas time and not discount as much as last year,” he added.
Shares of American Express Company (AXP) closed lower after the company reported a rise in quarterly profits. The company showed an 8.1% rise in quarterly profits. This was partially attributed to U.S. customers spending more. There was an increase of 9% in sales amongst U.S. cardholders, which in turn raised profits for the company by 14%. Net income was up to $1.48 billion, or $1.40 per share. The new reporting beat out this time last year, when third-quarter profits came in at $1.37 billion, or $1.25 per share.
Shares of Wal-Mart Stores Inc. (WMT) closed over 3.5% lower after the company cut sales forecast and slower profit growth. The retail giant reported that they now predict a rise in sales of 2% to 3% from the previously projected 3% to 5%. The news released today sent shares down in their biggest single-day drop in nearly two-years. Chief Executive Officer Doug McMillon, said, “We need to develop a more seamless relationship with our customers. We won’t just be a store on the street. We’ll support our customers’ lives, with them in the drivers seat, to save them money and time.”
That’s all for today,
Warren Gates, Normandy Research