Consumer discretionary stocks and sector related exchange traded funds were the worst hit area of the markets on Tuesday.
It follows after some consumer names revealed poor quarterly earnings and a monthly survey revealed lower consumer confidence in October.
On Tuesday, the Consumer Discretionary Select Sector SPDR (NYSEArca: XLY), Vanguard Consumer Discretionary (NYSEArca: VCR) and Fidelity MSCI Consumer Discretionary Index (NYSEArca: FDIS) declined 0.9%.
Disappointing corporate results dragged on the sector. Athletic apparel maker Under Armour (NYSE: UA) shares plunged 13.0% after revealing its slowest quarterly sales growth in six years, Reuters reports.
Home appliance maker Whirlpool (NYSE: WHR) shares decreased 12.5% showed revenue declined on a strong dollar.
The weakness in Whirlpool has been particularly hard on homebuilder-related ETFs, which include home furnishing exposure, as the appliance maker is one of the largest components in these funds. The SPDR S&P Homebuilders ETF (NYSEArca: XHB) retreated 3.1% and the iShares U.S. Home Construction ETF (NYSEArca: ITB) fell 2.5% on Tuesday.
[related_stories]“We’ve had some mixed earnings today and the market right now is digesting earnings and positioning itself ahead of the Fed meeting next week,” Jeff Zipper, managing director for investments at Private Client Reserve at U.S. Bank, told Reuters.
Further dragging on consumer cyclicals, the Consumer Confidence Index showed a 98.6 reading this month, reflecting a dip in consumers’ assessment of current business conditions and employment prospects, after rising in September to 103.5, its highest reading since January 2015, the Associated Press reports.
“Consumer confidence retreated in October, after back-to-back monthly gains,” Lynn Franco, director of economic indicators at The Conference Board, told CNBC. “Consumers’ assessment of current business and employment conditions softened, while optimism regarding the short-term outlook retreated somewhat. However, consumers’ expectations regarding their income prospects in the coming months were relatively unchanged.”
For more information on the consumer sector, visit our consumer discretionary category.
Consumer Discretionary Select Sector SPDR (NYSEArca: XLY)