US open: Retailers rise, but indices retreat from record highs

US stock markets opened lower on Tuesday despite a strong performance by retailers as investors took profits after the Dow Jones Industrial Average and S&P 500 reached new closing record highs the previous session.

While the wider market edged lower, retail stocks were on investors' shopping lists on the back of upbeat earnings after data from Redbook Research which showed that national chain-store sales were up 0.8% in February partly due to a recovery after recent snowstorms across the Northeast.

By 09:41 in New York, the Dow was down 0.3% and S&P 500 dropped 0.4%, retreating from all-time highs of 18,288.63 and 2,117.39 on Monday respectively.

Meanwhile, the tech-heavy Nasdaq was pulling back 0.4% after settling above 5,000 for the first time since the height of the dot-come bubble in 2000.

"Sentiment was lifted by somewhat of a ‘Merger Monday’ yesterday with two of the more prominent deals coming from HP which will buy Aruba Networks and PayPal which is set to buy Paydiant Inc," said analyst Jasper Lawler from CMC Markets.

Retailers gain, Ford slumps

Electronic appliances retailer Best Buy impressed analysts with a better-than-expected quarterly profit, a 21% increase to its dividend and a special dividend. The company also launched a share buyback programme for the first time since 2012.

Retail peer Dick's Sporting Goods also advanced after beating forecasts with its guidance for 2015 earnings, while Autozone was also higher after 15.6% growth in quarterly earnings surpassed expectations.

Meanwhile, fashion retailer Gap gained after being upgraded from 'market perform' to 'outperform' by FBR.

However, auto giant Ford dropped after saying that US vehicle sales were down 1.9% to 180,383 units in February compared with the same point last year. Truck sales rose 4% but were offset by an 8.1% drop in car sales and a 2.3% fall in utilities sales.