U.S. stocks ended the day almost unanimously in red with the Dow descending toward correction territory, down 530.94 points, or 3.12 percent, to 16,459.75.
What We Reported Earlier:
U.S. stocks plummeted yet again Friday — the Dow tanking as much as 300 points in pre-market trading — as concerns about China’s stock market and slowing global growth, by extension, continue to take their toll on investor sentiment.
Global stock declines have been the trend for most of the week — but early signs of China’s economic decline came in June.
U.S. investors are now grappling with an impending Fed rate hike — which may be announced at the next two-day Federal Open Market Committee (FOMC) meeting on Sept. 16-17 — as well as China’s stock market yo-yoing which has been more of a consistent downward spiral in recent days. The ongoing devaluation of China’s currency, the yuan, is also stoking fears and negatively impacting the attractiveness of China’s assets.
“The latest data points throughout much of the world have not been especially encouraging relevant to growth [and] Q2 results and outlook from retailers, including some footwear players, have been mixed,” said B. Riley & Co. LLC analyst Jeff Van Sinderen. “Although we continue to believe that footwear is trending better than apparel, companies with international exposure or exposure to regions that are macro-economically sensitive to oil prices seem to facing some headwinds in certain pockets of their businesses.”
At 11:35 a.m. EDT the Dow was down 301.10 points, or 1.77 percent, to 16,689.59; the Nasdaq lost 103.88 points, or 2.13 percent, landing at 4,773.61; and the S&P 500 declined 37.94 points, or 1.86 percent, to 1,997.79.
Meanwhile, Asia’s markets led the global slump with the Shanghai Composite tanking 156.55 points, or 4.27 percent, to 3,507.74 and Hong Kong’s Hang Seng Index losing 347.85 points, or 1.53 percent, to land at 22,409.62. Japan’s Nikkei share average dropped 597.69 points, or 2.98 percent, to 19,435.83. (All figures logged at 11:35 a.m. EDT)
Footwear stocks could not avoid the collapse, even Foot Locker Inc.’s robust second quarter performance couldn’t rescue it from the impact of slumping investor sentiment.
At 11:35 a.m. EDT Foot Locker’s share price declined 3.10 percent to $69.50; Dick’s Sporting Goods dropped 2.89 percent to $50.06; Caleres lost 1.04 percent to $32.20, Nike Inc. was down 4.27 percent to $107.50; Deckers Brands were down 3.28 percent to $64.50.
Under Armour Inc. declined more than 5 percent in midday trading and Skechers USA Inc. also plummeted more than 4 percent.
“China’s economy is clearly slowing and that will impact other parts of the world. That said, there are still relatively strong business trends/outlook for several footwear companies and brands that are resonating well with strong, relevant product are poised to be the winners in this environment,” Van Sinderen said.