Staples, Joy Global and Cliffs Hit S&P 500 ETF
Staples ( SPLS ),Joy Global ( JOY ) andCliffs Natural Resources ( CLF ) supplied the biggest losses in the S&P 500 Tuesday.
SPDR S&P 500 ( SPY ) skidded 0.94% to 144.28 to trade in the red for a third-day straight.
PowerShares QQQ ( QQQ ), tracking the 100 largest nonfinancial stocks on the Nasdaq, sank 1.17% to 68.92, taking losses for a fourth day in a row.
SPDR Dow Jones Industrial Average (DIA) eased 0.64% to 134.45.
All are still trading near multiyear highs and remain high above their moving averages, which is very bullish.
Shares of Staples, the largest U.S. office supply retailer, clipped off 5.3% as it fell deeper below its 50- and 200-day moving averages, a very bearish development. Staples announced it’s shutting down 30 stores in North America and downsizing 30 more to cut costs by about $250 million a year by the end of 2015 amid slowing economic growth.
It’s taking a pretax charge of up to $1.12 billion from depreciating assets in Europe and the costs of closing down stores. It plans to close 45 stores in Europe.
Mining equipment maker Joy Global crashed 5% after competitorCaterpillar (CAT) lowered its forecasts for the next few years citing an “anemic” global economy.
Coal and iron ore producer, Cliffs of Cleveland, Ohio, fell 4%. It’s been in a steady downtrend since February and trades deep below its 50- and 200-day moving averages. Cliff is down 37% year to date and 30% in the past year. Basic materials prices tumbled this year because of oversupply in China and slower global economic growth.
“The struggles in metallurgical coal are further compounded by increasing supply and competition between Australian suppliers and Mongolian suppliers,” said Paul Robinson, senior economist at market research firm IHS in Washington D.C. “Up until a couple of years ago, Australia was pretty much the only game in town in the Pacific basin, but now there has been an explosion of overland imports from Mongolia into China and some inroads oversea from the United States. Just as in the case of steel markets, demand isn’t strong enough to absorb this excess supply and prices are responding likewise.”