Stocks gave up early gains to close sharply lower today as investors grappled with concerns about the strength of consumer spending and the overall US economy after downbeat comments from JC Penney and Wells Fargo.
Investors turned away from retailers and banks, while falling oil prices sent shares of energy companies down.
Wall Street is concerned about rising gas prices. Although oil has come off the highs seen last week, prices remain elevated and could cramp consumer spending as the all-important holiday shopping season approaches.
“The JC Penney comments in terms of their guidance have sort of put another nail in retail. The assumption is the consumer has given up,” said Charlie Smith, chief investment officer at Fort Pitt Capital Group in Pittsburgh. “Three-dollar to 3.20 a gallon gas and house prices falling at 5% a year is really a double-whammy the consumer can’t overcome.”
The Dow Jones industrial average fell 120.96, or 0.91%, to 13,110.05.
Broader stock indicators also declined. The Standard & Poor’s 500 index fell 19.42, or 1.32%, to 1,451.16. The Nasdaq composite index fell 25.81, or 0.98%, to 2,618.51.