By David Benoit and Donna Kardos Yesalavich Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)–U.S. stocks opened slightly lower Tuesday after a report on expectations for Europe’s biggest economy widely missed forecasts, sending the euro lower.
The Dow Jones Industrial Average fell 22 points, or 0.2%, to 10520. Financials led the declines as JPMorgan Chase dropped 0.9% while Bank of America slid 1%.
The Standard & Poor’s 500-stock index slipped 0.3% to 1118 and the Nasdaq Composite fell 0.3% to 2279.
But the loses were tempered somewhat by a positive report on U.S. retail sales, with consumer discretionary the best performing sector.
Stocks had rallied on Monday, led by financials, which gave back part of those gains on Tuesday.
Overnight European indexes had fallen after a closely watched survey on expectations for Germany’s economy, the biggest in the European Union, fell short of forecasts. The survey, published by the ZEW economic research institute, showed a drop in its economic expectations index to -4.3 in September, its lowest level since February 2009.
The ZEW survey sent the euro lower to $1.2851, from $1.2876 late Monday in New York. The Japanese yen hit a fresh 15-year high against the greenback, as Prime Minister Naoto Kan survived a challenge to his leadership of the ruling party.
Meanwhile, helping keep the loses to a minimum, the Commerce Department said U.S. retail sales rose a better-than-expected 0.4% in August. Economists had forecast sales would rise 0.3%. The increase follows a 0.3% climb in July, revised down from the initial estimate of 0.4%.
“Retail sales was a little bit better than expected but the prior month was revised down by the same amount this one was better than expected, so it kind of washes out,” said Liz Ann Sonders, chief investment strategist at Charles Schwab.
Nevertheless, Sonders said that it is encouraging to see retail sales coming in better than consumer confidence figures had indicated.
“Just asking someone what you feel versus judging what they’re doing, the latter is more relevant in my mind,” she added.
Treasurys rose, pushing the yield on the 10-year note down to 2.71%. Crude-oil futures slipped while gold futures rose.
Among stocks in focus, Best Buy jumped 7.1%. The consumer-electronics retailer’s fiscal second-quarter earnings jumped 61%, walloping analysts’ estimates, as the company rebounded from a weakened year-earlier quarter on higher revenue and margins.
-By David Benoit