Investing.com -- U.S. stocks fell sharply on Friday, ending the week with a whimper, as Financials and Consumer Staples, as well as a flattening of the yield curve weighed on the major indices.
The volatile week ended on a down note, as JC Penney Company Inc Holding (NYSE:JCP) capped a horrendous earnings period for top retailers by reporting weak quarterly earnings and sales for the first quarter. For the three-month period, JC Penney reported revenues of $2.81 billion on losses of 0.32 per share, topping earnings' forecasts but missing out on sales' expectations. The downbeat results followed weaker-than-expected earnings from Macy’s Inc (NYSE:M), Nordstrom Inc (NYSE:JWN) and Kohl’s Corporation (NYSE:KSS) earlier this week, exacerbating fears on the acceleration of the demise of the brick-and-mortar industry. As a result, the SPDR XRT Retail ETF extended losses from last month and has now fallen by as much as 11% since the start of April.
The Dow Jones Industrial Average lost 185.18 or 1.05% to 17,535.32, while the NASDAQ Composite index fell 19.65 or 0.41% to 4,717.68, continuing its recent downturn. At session-lows, the Dow tumbled by as much as 208 points. The S&P 500 Composite index, meanwhile, dropped 17.50 or 0.85% to 2,046.61, as all 10 sectors closed in the red. Stocks in the Energy, Industrials and Financials industries lagged, each falling by more than 1% on the session. The S&P 500 is virtually flat year-to-date.
Separately, investors reacted to a flattening in the yield curve between short-term U.S. 2-Year Treasuries and longer-term 10-Year government bonds. At session-highs, the 2-year surged to 0.786%, its highest level in 10 days. Around the same time, government bond yields on the 10-year fell to a one-month low at 1.705%. A flattening of the yield curve typically sends indications of a slowdown in short-term economic activity.
The top performer on the Dow was Intel Corporation (NASDAQ:INTC), which added 0.17 or 0.57% to 29.93. Intel entered Friday's session with a Price-to-Earnings ratio of 12, a level regarded as relatively undervalued by Wall Street analysts. By comparison, the average PE ratio of a company listed on the S&P 500 currently hovers around 21. The worst performer was WMT, which fell 1.86 or 2.78% to 64.99. On Thursday, Wal-Mart (NYSE:WMT) launched a two-day shipping subscription service aimed at taking on Amazon.com Inc (NASDAQ:AMZN) Prime. In total, only three Dow components closed in the green in Friday's session.
The biggest gainer on the NASDAQ was NVIDIA Corporation (NASDAQ:NVDA), which soared 5.39 or 15.15% to 40.96 after the chipmaker topped analysts' forecasts for the first quarter. On an annual basis, Nvidia saw its revenues surged 46% amid increased demand among video game enthusiasts to pay for higher-quality graphics. The worst performer was Dollar Tree Inc (NASDAQ:DLTR), which fell 2.70 or 3.36% to 77.59. Shares in Dollar Tree are relatively flat over the last 52-weeks.
Nvidia was also the top performer on the S&P 500, just ahead of Endo International PLC (NASDAQ:ENDP), which added 0.63 or 4.68% to 14.08. Shares in Endo rallied after hitting a 52-week low at 12.56 in the previous session. It came amid multiple reports that the U.S. Attorney's Office for the Southern District of New York has approached a host of leading drug makers for information about their contracts with pharmacy benefit managers. The worst performer was Nordstrom, which plunged 6.15 or 13.60% to 39.08. Shares in Nordstrom fell to fresh 1-year lows on Friday, one day after the Seattle-based retailer badly missed earnings forecasts amid declining same-store sales.
On the New York Stock Exchange, declining issues outnumbered advancing ones by a 2,030-1,008 margin.