The S&P 500 was down 0.16%, the Dow Jones Industrial Average fell 0.13%, and the Nasdaq added 0.09%. The Dow closed lower for its fourth straight session in a row.
Nordstrom fell 10% after same-store sales came in below analysts' projections. Comparable-store sales fell 0.8%, worse than the 0.1% decline analysts had forecast. Net income of 31 cents a share beat estimates by 4 cents. Revenue rose 3.1% to $3.35 billion, edging past consensus by $10 million.
Nordstrom's recent quarter only highlights how Amazon (AMZN - Get Report) is shaking up the retail sector, Jim Cramer argues on TheStreet's premium site for investors, Real Money. Get his insights with a free trial subscription.
J.C. Penney tumbled more than 9% after falling short of sales estimates. Revenue declined to $2.7 billion from $2.8 billion, compared with estimates it would be unchanged. Same-store sales declined by 3.5%, far steeper than an anticipated decline of 0.7%. The department store chain anticipates full-year same store-sales will be 1% lower to 1% higher.
Other retailers with disappointing earnings this week include Macy's (M - Get Report) and Kohl's (KSS - Get Report) . Retailers were lower on Friday. The S&P Retail SPDR ETF (XRT - Get Report) declined by 1.7%.
Retail sales rose at a healthy pace in April, a promising sign that recent strength in consumer confidence had begun to translate to spending. U.S. retail sales increased 0.4%, slightly weaker than an expected increase of 0.5%. Sales were up 4.5% compared to a year earlier. March's monthly decline of 0.2% was revised to show a 0.1% increase.
"Today's data do not alter our view that the Federal Reserve will tighten policy in June," Barclays' Blerina Uruci said in a note. "Labor markets remain strong, and communications from FOMC members have been clear that they remain focused on a tightening policy path. We think softer-than-expected CPI prints for March and April are unlikely to deter the FOMC from action."
The chances of an increase in the federal funds rate to 1% to 1.25% at the June meeting sits at nearly 74%, according to CME Group fed funds futures. A better-than-expected April jobs report last week raised the prospects that the Federal Open Market Committee, which sets monetary policy, would raise interest rates in June.
The U.S. economy is "looking good," making two more rate hikes appropriate this year, Philadelphia Fed President Patrick Harker said on Friday. In comments to the Urban Economic Conference at Drexel University, Harker also said weakness over the first quarter would likely prove temporary. Harker is a voting member of the Federal Open Market Committee this year.
Consumer sentiment ticked even higher in May, according to a preliminary reading of the University of Michigan's index. Sentiment rose to 97.7 in May, up from 97 in April. Analysts expected a flat reading this month. A healthy labor market, slow but steady growth in the U.S. economy, and a booming stock market have created optimism among U.S. shoppers.
Consumer prices rose in April, rebounding from weakness seen a month earlier. The Consumer Price Index climbed 0.2% amid increases in energy costs after falling 0.3% in March. Energy prices increased 1.1% in April. Excluding food and energy, core prices rose 0.1%.
The Nasdaq broke its four-day record-making streak on Thursday as a disappointing quarterly performance from Snap (SNAP - Get Report) pulled tech names lower. The S&P 500 and the Nasdaq both narrowly set new record closes on Wednesday as volatility held at its lowest level in more than two decades.
Cocktails & Cramer
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