News Column

Weather cited as factor as stocks end lower

February 26, 2014

KEN SWEET; KEN SWEET The Associated Press

NEW YORK - Stocks were unable to find any momentum on Tuesday.

The market drifted between gains and losses throughout the day, then headed steadily lower in the last hour of trading. Investors found some solace in strong results from Home Depot and Macy's. The enthusiasm was not enough, however, to offset an unexpectedly steep decline in consumer confidence this month, due largely to bitter cold weather and winter storms that affected much of the country.

"The weather is having an impact on everything, from homes, vehicles to retail sales, but fortunately we expect that pent-up demand to return later this year," said Joseph Tanious, a global market strategist at J.P. Morgan Funds.

The Dow Jones industrial average lost 27.48 points, or 0.2 percent, to 16,179.66. The Standard & Poor's 500 index fell 2.49 points, or 0.1 percent, to 1,845.12 and the Nasdaq composite fell 5.38 points, or 0.1 percent, to 4,287.59.

Even the retailers, who have a tendency to blame the weather for poor results, had a valid point this time around.

Macy's reported an 11 percent rise in fourth-quarter income that handily beat analysts' expectations, but sales came up short due to the weather. The company said that at one time in January, 30 percent of its stores were closed because of inclement weather.

Home Depot had a similar story. The nation's largest home improvement retailer said profits fell 1 percent from a year ago, hampered by bad winter conditions.

"We don't like to use weather as an excuse but we think we probably lost $100 million in the month of January," Home Depot's chief financial officer, Carol Tome, said in a conference call with investors.

Investors were able to forgive Macy's and Home Depot for missing analysts' sales expectations. Macy's rose $3.19, or 6 percent, to $56.25 and Home Depot closed up $3.11, or 4 percent, to $80.98.

Investors were less forgiving about a weak consumer confidence report.

The Conference Board's index of consumer confidence fell to 78.1 in February from 80.7 the month before. That was below the 80.1 level economists polled by FactSet were expecting.


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Source: Telegraph-Herald (Dubuque, IA)


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