Downbeat earnings forecasts from big retailers sent the Dow and S&P 500 lower Tuesday. They raised investor concerns about the consumer's ability to keep supporting the U.S. economy. But a tech stock rally led by Broadcom and Facebook lifted the Nasdaq.
Vespula Capital CEO Jeff Tomasulo:
SOUNDBITE: VESPULA CAPITAL CEO JEFF TOMASULO (ENGLISH) SAYING:
"The market is starting to get a little overextended. I would look at some of my positions and see where I am overextended and start to take profits or protect myself because protection is really cheap when the market is going up like that."
The heaviest drag on the Dow and S&P: Home Depot. The home improvement retailer cut its sales forecast for the full year for the second time this year. Its online initiatives aren't delivering results as fast as the company had expected. The retailer fared poorly even though the Commerce Department reported that groundbreaking on new homes rebounded in October and building permits jumped to their highest level in more than 12 years.
Shares of department store operator Kohl's plummeted. Sales and profit widely missed Wall Street's forecasts, and the retailer slashed its profit forecast for the full year. That dragged down shares of rivals Macy's and Nordstrom.