Stocks Fell after FOMC Statement; Retail Weighed (AAPL, AMZN, BBY, DD, M, MCD, MRO, NTAP, PFE, RRC, SBUX, URBN)

Published on Tuesday, 13 December 2011 17:46 Written by Christopher Lynn

New York, December 13^th (TradersHuddle.com) – Stocks closed lower after losses accelerated in late trading following disappointment from the Fed statement, which added to woes from a weaker than expected retail sales report. Renewed jitters from the euro zone impacted the euro, which broke down below a key technical level, spurring a pullback in equities and a move towards safe haven.

The Dow Jones Industrial Average fell 66.45 points, or 0.55%. The S&P 500 index lost 10.74 points, or 0.87%, while the NASDAQ slumped 32.99 points, or 1.26%

The market started with modest gains, following European trade, after a good showing for Spanish bonds. Participants were mildly disappointed after weaker than expected U.S. retail sales for the month of November, where the record sales over the Thanksgiving weekend were not able help move the monthly figures above expectations. November retail sales climbed 0.2% for November, according to the Commerce Department.

In Europe, equity markets closed mixed, with London outperforming, after comments from German Chancellor Angela Merkel weighed on sentiment and helped pushed stocks lower. Germany continues to be against boosting the permanent rescue mechanism to be launched next year with an effective lending capacity of 500 billion euros. Energy shares outperformed as crude oil surged on news of Iranian military exercises in the Hormuz straight. Equities had been higher earlier after a successful Spanish debt auction.

The upside momentum ahead of the Fed took stocks to sizeable gains, with the broad market index trading near its resistance level, which in conjunction with the euro breaking below the $1.31 level spurred a pullback that accelerated after the FOMC statement failed to spur excitement amid the investment community. Participants had speculated that the Fed might provide additional hints of a consideration to further quantitative easing.

Most of the S&P 500 sectors closed in negative territory, with only the utilities sector ending in positive territory.  Consumer discretionary, materials, and financials posted the biggest declines, while energy had a big swing from gaining more than 1% at the highs of the session to end with nearly a 1% loss.

Discretionary stocks were the weakest, with retailer getting hit particularly hard after the weaker than expected retail sales data in the U.S. suggested that the record sales over the Thanksgiving weekend were likely short lived. The sector was under heavy pressure following the earnings miss from Best Buy (NYSE:BBY). The electronics retailer tumbled to the bottom of the S&P 500 after it missed earnings expectations by $0.05 per share on revenues that were inline with expectations. Shares of Best Buy plunged 15.5% in the session, as margins suffered amid deep discounting, as the retailer fends off fierce competitions from online giant Amazon.com.

Shares of Amazon (NASDAQ:AMZN) also suffered, falling 4.75% to $180.51, as Goldman Sachs resumed its coverage on the stock with a Neutral rating.

Other retailers were also under pressure, Macy’s (NYSE:M), the department store operator, tumbled 4.98% to $30.71. Macy’s has outperformed all year, with the retailer posting a 52-week high at $33.26 just last week. Year to date, the stock has a gain of 21.4%.

But not all was weakness in the retail space, as Urban Outfitters (NASDAQ:URBN) surged to the top of the S&P 500 Index. The owner and operator of Urban Outfitters and Anthropologie retail chains jumped more than 5% after on a regulatory filing, the company disclosed comparable retail sales were tracking better than expected.

Also in the space, both McDonald’s (NYSE:MCD) and Starbucks (NASDAQ:SBUX) slumped after posting new all time highs. McDonald’s fell 0.5% after trading as high as $98.95, while Starbucks lost 0.9% after trading as high as $45.

In the energy sector, crude oil settled higher by 2.4% at $100.14 per barrel after a surge on news that the Iranian military shut the Strait of Hormuz for exercises, spurring concern amid traders of an increased in geopolitical tensions with the rogue state. However the gains in the related shares were not sustained. Marathon Oil (NYSE:MRO) posted the biggest gains in the sector, jumping 1.17% to $27,64 after trading as high as $28.53. Marathon was upgraded to a Buy at Deutsche Bank.

Range Resources (NYSE:RRC), the independent oil and gas Company, was the worst performer, tumbling 4.57% to $61.95, as the stock goes ex-dividend tomorrow. Range Resources will pay $0.04 per share to the owners of record at the end of the session.

In the technology space, Apple (NASDAQ:AAPL) fell 0.77% to $388.81, closing below its 50day moving average at $390.99. The stock fell amid speculation that it was considering making a bid for Israel's Anobit, a maker of flash storage technology, for as much as $500 million. Anobit’s technology is already on Apple’s devices, but the tech giant is interested in the technology to increase and enhance the memory volume and performance of its devices, as it may as much as double the memory volume in the new iPads and MacBooks. Yesterday, Bernstein reiterated Apple as its Top Pick with a target price of $575, saying the market has been overly pessimistic on the stock in the recent weeks. Also, Ticonderoga said that Apple had its best November on record, according to its internal sales barometer.

NetApp (NASDAQ:NTAP), the storage and data management solutions provider jumped more than 2% in a down day, posting one of the biggest gains in the broad market index and the NASDAQ 100 after some positive comments from JPMorgan.

Elsewhere, Pfizer (NYSE:PFE), the world’s largest pharmaceutical company, gained 1.8% to $20.76, logging the best gain in the blue chip index. Yesterday, the company announced a new 10 billion share repurchase program, while it increased its dividend by 0.22 per share.

Also in the Dow, DuPont (NYSE:DD) fell 0.96% to $43.49 after trading as high as $45 after the company reaffirmed its 2012 outlook for 7 to 12% earnings and revenue growth. DuPont just last week had lowered its fourth quarter and full year 2011 revenue guidance, citing economic uncertainty.