Wal-Mart is expected to announce results this week along with top tech names such as Hewlett-Packard, which has been in the spotlight since its chief executive’s resignation on 6 August after the closing bell.
So far this earnings period, some 75 per cent of results from Standard & Poor’s 500 companies have beaten earnings estimates, according to Thomson Reuters estimates, offsetting a batch of economic reports that pointed to a slowdown in the recovery. But for retailers, which typically round out the earnings period, results have been less optimistic. If forecasts from JC Penney and others are any indication, reports this week could confirm concern about a weaker outlook for the sector.
“The tone among retailers has changed somewhat, and the outlook now looks somewhat less upbeat than it did earlier this year in the retail space,” said Michael Sheldon, chief market strategist at RDM Financial in Connecticut.
“We’re likely to hear more about somewhat sluggish consumer spending.”
JC Penney forecast a profit for the year below Wall Street’s expectations last week and said its customers were vulnerable to weak economic conditions, a day after department stores Kohl’s and Nordstrom’s gave conservative profit outlooks.
The Federal Reserve also gave a bleaker outlook on the economy last week.
Technology shares led losses on Friday, with the Nasdaq ending the week down five per cent, while the Dow fell 3.3 per cent and the S&P 500 slid 3.8 per cent.