August 16, 2022

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Wall Street is falling with a warning from Wal-Mart that shakes the retail sector

Wall Street is falling with a warning from Wal-Mart that shakes the retail sector

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, July 21, 2022. REUTERS/Brendan McDermid

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  • Walmart cuts earnings forecast, pulls retailers
  • McDonald’s rose as sales, higher estimates of profits
  • General Electric jumps on higher profit, while Coca-Cola rises amid expected increase
  • Indices down: Dow 0.56%, S&P 1.17%, Nasdaq 1.83%

July 26 (Reuters) – U.S. stock indexes fell on Tuesday after a Walmart profit warning that fueled fears in the retail sector that consumers are cutting discretionary spending in the face of decades of high inflation.

Walmart stock (WMT.N) It fell 7.7%, while Target Corp. shares fell (TGT.N) and Amazon.com Inc (AMZN.O) Both fell more than 4%, and the online retail giant was the heavyweight on the Nasdaq (nineteenth). Read more

In a sign of growing pressure to support profits amid rising costs, Amazon said it will raise delivery and streaming fees for Prime in Europe by up to 43% annually. Read more

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S&P 500 Consumer Appreciation Index (.SPLRCD) It fell 3.2%, leading sectoral declines. S&P 500 Retail Index (.SPXRT) It fell 3.9%.

“There is a general expectation that Walmart’s problems are indicative of the entire retail space,” said Chuck Lieberman, chief investment officer at Advisor Capital Management.

“There is no doubt that inflation is higher than people feel, and that will likely remain the case for some time.”

Besides high inflation, a strong dollar is also expected to affect the earnings of companies with sprawling global operations.

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Wall Street’s major indexes rebounded from their mid-June lows as slumping commodity prices and downbeat economic data prompted investors to scale back expectations of an interest rate hike by the Federal Reserve, but fears of a recession have recently sapped momentum.

The Fed is widely expected to raise rates by 75 basis points at the end of its two-day policy meeting on Wednesday, which will be followed by comments from Chairman Jerome Powell.

Data showed that US consumer confidence fell to its lowest level in a year and a half in July, indicating a slowdown in economic growth at the start of the third quarter. Read more

Thursday’s Q2 GDP data is likely to turn negative after the US economy contracted in the first three months of the year.

Meanwhile, the International Monetary Fund lowered its global growth forecast again, warning of the risks of high inflation and the Ukraine war. Read more

At 12:19 p.m. EDT, the Dow Jones Industrial Average (.DJI) The Standard & Poor’s 500 Index fell 178.18 points, or 0.56%, to 31,811.86 points (.SPX) The index fell 46.24 points, or 1.17%, to 3,920.60 points, and the Nasdaq Composite (nineteenth) It was down 215.17 points, or 1.83%, at 11,567.50 points.

Among the ingredients for Dow, The Coca-Cola Company (KO.N) Gained 1.6% after the company raised full-year revenue expectations, while McDonald’s Corp. (MCD.N) It rose 2.6% after beating quarterly expectations. Read more

3ME Company (MMM.N) It rose 6.4% after the industrial giant said it intends to separate its healthcare business. Read more

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General Electric Company (GE.N) It gained 6.6% after the US manufacturing bloc beat revenue and profit estimates, while General Motors (GM.N) It fell 3.3% after reporting a 40% drop in quarterly net income. Read more

Apple company (AAPL.O)Netflix, Inc (NFLX.O)Tesla Inc (TSLA.O) Alphabet Inc shares were down 1.5% each (GOOGL.O) and Microsoft Corporation (MSFT.O) It fell 2.5% and 3.2%, respectively, prior to their after-market quarterly reports.

Profits for S&P 500 companies are expected to rise 6.2% for the second quarter compared to the same period last year, according to Refinitiv data.

Declining issues outnumbered advanced stocks by 1.94 to 1 on the New York Stock Exchange and by 1.82 to 1 on the Nasdaq.

The S&P recorded a new 52-week high and 30 new lows, while the Nasdaq recorded 28 new highs and 103 new lows.

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Additional reporting by Shriyashi Sanyal and Aniruda Ghosh in Bengaluru; Editing by Arun Koyyur and Anil D’Silva

Our criteria: Thomson Reuters Trust Principles.