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US midday: Stocks deep in the red

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Date: Tuesday 13 May 2008

LONDON (ShareCast) - US stocks were down deep in the red as investors contemplated mixed retail data and Wal-Mart's cautious outlook.

The Commerce Department said April retail sales fell 0.2%, as expected, having risen 0.2% in March. Excluding cars, April retail sales rose ahead of expectations, indicating that Americans are still nervy about making big purchases.

Ben Bernanke said the financial markets have improved thanks to the Fed's recent liquidity measures but added that the environment is still “far from normal.”

Elsewhere, the 1.8% rise in import prices in April was largely in line with forecasts, while the National Association of Realtors said single-family home prices fell 7.7% in the first quarter.

Across the markets, the Dow Jones is down 74 points to 12,801 with the Nasdaq falling 6 points to 2481. The S&P 500 is down 3 points.

On the corporate front, Wal-Mart, the world’s largest retailer, surpassed analysts’ forecasts with its first quarter earnings, but sounded a note of caution on its prospects for the second quarter.

Computing products giant Hewlett Packard confirmed that it is buying computer services company Electronic Data Systems for $13.9bn in cash. It also said all of its segments performed well in the second quarter and it remains strongly cash generative.

Staying on the M&A trail, Staples raised its hostile bid to acquire Dutch rival Corporate Express to $2.27bn.

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