U.S. stocks fall as Fed’s Williams discusses tapering stimulus

Grocery Prices

Wal-Mart fell 2.2% to $78.07. Chief Executive Officer Mike Duke has cut prices on groceries and other necessities as the chain’s lower-income shoppers deal with elevated unemployment and increased Social Security taxes. First-quarter sales at U.S. Wal-Mart stores open at least 12 months fell 1.4%, the first drop after six straight gains. Analysts estimated a 0.1% decline.

The retailer forecast second-quarter profit will be $1.22 to $1.27 a share. Analysts had projected $1.29, the average of 24 estimates compiled by Bloomberg.

An index that tracks homebuilder stocks slumped 1.6% as all 11 members retreated. The gauge has gained 22% this year. PulteGroup Inc., the largest U.S. homebuilder by revenue, dropped 2.4% to $23.40. D.R. Horton Inc. lost 1.9% to $26.91.

Berkshire Hathaway Inc. Class B shares slid 0.8% to $111.81 after S&P lowered the company’s credit rating. S&P cut Berkshire to AA from AA+, saying the downgrade “better reflects our view of BRK’s dependence on its core insurance operations for most of its dividend income,” referring to Warren Buffett’s company by its ticker symbol.

AMD Slips

Advanced Micro Devices Inc., which makes semiconductors, slid 13% to $3.80. The stock has surged 58% since April 15, sparked by Sony Corp.’s decision to use AMD chips for the next version of its PlayStation console.

Technology shares rallied 1% as a group, with Cisco Systems surging 13% to $24. Cisco is benefiting as companies step up investments in data-traffic networks to accommodate users who are increasingly relying on smartphones and tablets to watch video and surf the Web.

Tesla Motors gained 10% to $93.48. The electric-car maker run by Elon Musk said in a U.S. regulatory filing that it will use the proceeds from selling 2.7 million shares, valued at $229 million at yesterday’s closing price, and $450 million in convertible senior notes due in 2018, to pay off a federal loan and fund other operations.

Kohl’s Corp. soared 4.6% to $51.98, the highest since November. The third-largest U.S. department-store chain reported first-quarter profit of 66 cents a share, while analysts surveyed by Bloomberg had estimated 57 cents on average.

Bloomberg News

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