Ulta Beauty, Lululemon, and Other Stocks Fall After Chipmakers' Warnings
Retail and tech stocks dropped on Thursday after chipmakers issued weak forecasts, raising concerns over the economy and corporate profits.
Key Points:
- Ulta Beauty shares fell 10% after the cosmetics retailer cut its profit outlook.
- Lululemon shares dropped 8% after the athletic apparel company warned of slowing demand.
- Marvell Technology, Dell Technologies, and Intel all reported disappointing earnings and outlooks.
The sell-off in chipmakers began on Wednesday after Micron Technology Inc. issued a gloomy forecast, citing weak demand for its memory chips.
Other chipmakers quickly followed suit, with Marvell Technology, Dell Technologies, and Intel all reporting disappointing earnings and outlooks. This raised concerns that the chip industry, a key driver of economic growth, is facing headwinds.
The weakness in the chip sector spread to other tech stocks, with Apple, Microsoft, and Amazon all falling on Thursday. The Dow Jones Industrial Average fell 1.5%, the S&P 500 dropped 2%, and the Nasdaq Composite lost 2.5%.
Retail stocks were also hit hard, with Ulta Beauty and Lululemon both reporting weaker-than-expected results. Ulta Beauty cut its profit outlook for the year, citing rising costs and slowing consumer spending. Lululemon warned that demand for its products was slowing, especially in North America.
The sell-off in stocks on Thursday reflects concerns about the economy and corporate profits. The chip industry is a key indicator of economic health, and the weak forecasts from chipmakers suggest that the economy may be slowing.
The weakness in the retail sector is also a concern, as it indicates that consumers may be pulling back on spending.
Investors will be closely watching other economic data in the coming weeks to see if the weakness in the chip and retail sectors is a sign of a broader economic slowdown.
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