Battered retailer shares pull US stocks lower

Investors pummelled retailers Wednesday, sending US stocks sharply lower after weak Macy's earnings revived worries about the future of brick-and-mortar stores.

Macy's plummeted 15.2 percent after slashing its 2016 forecast, saying it now expects comparable-store sales to fall between three and four percent.

"People don't go to the malls anymore, they buy everything on Amazon or over the Internet," said Mace Blicksilver, director of Marblehead Asset Management. "So we have profound winners and losers."

Dow member Wal-Mart lost 2.8 percent, while Best Buy, Target and Nordstrom shed 4.0 percent or more. All report earnings over the next week.

The Dow Jones Industrial Average fell 1.2 percent to 17,711.12.

The broad-based S&P 500 dropped 1.0 percent to 2,064.46, while the tech-rich Nasdaq Composite Index sank 1.0 percent to 4,760.69.

The losses came despite strong gains in oil prices that lifted the US benchmark contract to its highest level of 2016.

"Up until now, every time oil picked up, so did the S&P 500," Blicksilver said.

The shift could mean investors are becoming more concerned that higher oil prices could curtail consumer spending, he added.

Office supplies retailer Staples plunged 18.4 percent and rival Office Depot 40.4 percent as they called off their merger plan after a US court blocked the deal on antitrust grounds.

Dow member Disney tumbled 4.1 percent after reporting earnings that translated into $1.30 per share, or $1.36, excluding some one-time items, below the $1.40 expected by Wall Street

Videogame developer Electronic Arts surged 13.7 percent as its quarterly net income more than doubled to $899 million.

Fossil Group, a maker of watches, sunglasses and other accessories, dived 29.1 percent as first-quarter net income shrunk 84.8 percent to $5.8 million. The company said "headwinds" facing its watch business have intensified.