Dow slips to worst week of 2013

Published on NewsOK Modified: August 16, 2013 at 4:27 pm •  Published: August 16, 2013

Retailers continued their multi-day selloff. Nordstrom Inc. gave a bleak sales outlook late Thursday that echoed similar forecasts from Wal-Mart Stores Inc. and Macy's Inc. earlier this week. The outlooks have raised worries that U.S. shoppers might be pulling back on spending.

Nordstrom's stock fell $2.90, or 4.9 percent, to $56.43, making it the biggest decliner in the S&P 500.

The retail industry is a closely-watched part of the U.S. economy as consumer spending makes up roughly 70 percent of economic activity. The disappointing outlooks are worrisome because they take into account the back-to-school shopping season, typically the second-biggest shopping period for U.S. retailers.

"It's left us scratching our heads," Fox said. "It really forces you to ask the question: 'is the consumer slowing down?'"

Investors have also been concerned about what will happen to the stock market -- and the U.S. economy -- if the Fed begins winding down its $85 billion-a-month bond-buying program in September. Some investors think that the Fed's program has been a large contributor to the stock market's record run.

"The big question is, will the Fed eliminate the bond-buying program in September, and, if so, how they will they remove the bond buying," said Frank Davis, director of sales and trading for LEK Securities.

With the bond market declining and stocks selling off, investors shifted into a safer asset — gold. Its price rose $10.1, or 0.7 percent, to $1,371. Gold had its third-best week this year, rising 3.7 percent.

Also in focus were homebuilders. The government reported that new home construction was up 6 percent in July to a seasonally-adjusted rate of 896,000.

Shares of homebuilders PulteGroup Inc., and Lennar Corp. closed up 2.3 percent and 1.8 percent, respectively.

Housing has been one of the bright spots of the U.S. economy for the last several months. In June, home builders sought the most building permits for single-family homes in five years. New-home sales jumped in June to their highest level in five years as well.

In other news, personal computer maker Dell Inc. reported a 72-percent drop in its fiscal second-quarter earnings. That may help convince Dell shareholders to approve the $24.8 billion buyout proposed by founder Michael Dell. and private-equity firm Silver Lake.

Shares of Dell rose 12 cents, or 0.8 percent, to $13.82 - below the proposed buyout price of $13.88 per share.