Indices fall as Walmart’s profit warning spooks investors

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

NEW YORK, July 26 (Reuters) – U.S. stocks fell sharply on Tuesday as Walmart’s profit warning dragged down retail shares and unusually weak consumer confidence data also fueled spending fears.

Walmart (WMT.N) shares fell 7.6% after the retailer cut its full-year profit forecast on Monday. Walmart blamed rising food and fuel prices and said it needed to cut prices for parent supplies. read more

Shares of Target Corp (TGT.N)3.6% and Amazon.com Inc (AMZN.O) The S&P 500 retail index fell by 5.2% (.SPXRT) It decreased by 4.2%. read more

Data on Tuesday showed U.S. consumer confidence fell to its lowest level in nearly 1-1/2 years in July amid lingering concerns about high inflation and rising interest rates. read more

“Most of the companies reporting today beat earnings and they did. But of course there were some caveats and that’s what the market is focused on,” said Peter Cardillo, chief market economist at Spartan Capital Securities. in New York.

Amazon, which said it would raise fees for its delivery and streaming service in Europe by up to 43% a year, was the biggest loser on the Nasdaq and S&P 500, though consumer discretionary. (.SPLRCD)It fell 3.3% and led declines among the S&P 500 sectors. read more

The Federal Reserve has started a two-day meeting and is expected to announce a 0.75 percentage point rate hike on Wednesday to fight inflation. read more Investors are concerned that aggressive interest rate hikes by the Fed will push the economy into recession.

Dow Jones Industrial Average (.DJI) The S&P 500 fell 228.5 points, or 0.71%, to 31,761.54. (.SPX) The Nasdaq Composite lost 45.79 points, or 1.15%, to 3,921.05. (.IXIC) It fell 220.09 points or 1.87% to 11,562.58.

A busy week for earnings also included reports from Alphabet Inc (GOOGL.O) and Microsoft Corp (MSFT.O) after the call.

Shares of Microsoft rose 0.5% and Alphabet rose 3% after the companies’ results. Microsoft ended the regular session down 2.7% and Alphabet down 2.3%. read more

Investors were eager to see if this week’s earnings news from mega-cap companies could help sustain the stock market’s recent rally. read more

According to Refinitiv data, earnings of S&P 500 companies were expected to increase by 6.2% in the second quarter compared to the previous period.

Also during the regular session, Coca-Cola Co (KO.N) rose 1.6% after the company raised its full-year revenue forecast. McDonald’s Corp (MCD.N) rose 2.7% after beating quarterly expectations. read more

3M Co (MMM.N) rose 4.9% after the industrial giant said it plans to spin off its healthcare business. read more General Electric Co (GE.N)The industrial conglomerate gained 4.6% after beating revenue and profit estimates.

In other forecasts, the International Monetary Fund again lowered its global growth forecasts. read more

US stocks traded 9.60 billion shares over the past 20 trading days, compared to an average of 10.93 billion shares for the full session.

On the NYSE, decliners outnumbered advancers by a ratio of 1.73 to 1; where the Nasdaq favored the decliners by a ratio of 1.72-1.

The S&P 500 hit 1 new 52-week high and 30 new lows; The Nasdaq Composite recorded 39 new highs and 138 new lows.

Additional reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Edited by Arun Koyyur, Anil D’Silva and David Gregorio

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