Indexes fall as Walmart profit warning spooks investors

  • Walmart slashes earnings forecast; news hits retailers
  • McDonald’s up in sales and profit
  • Coca-Cola on the rise thanks to its forecasts
  • Indices: Dow down 0.7%, S&P 500 down 1.2%, Nasdaq down 1.9%

NEW YORK, July 26 (Reuters) – U.S. stocks closed sharply lower on Tuesday as a Walmart profit warning sent retail stocks tumbling and unusually weak consumer confidence data also fueled fears about spending.

Shares of Walmart (WMT.N) fell 7.6% after the retailer cut its full-year profit forecast on Monday night. Walmart blamed soaring food and fuel prices and said it needed to cut prices to reduce inventory. Read more

Shares of Target Corp (TGT.N) fell 3.6% and Inc (AMZN.O) fell 5.2%, while the S&P 500 retail index (.SPXRT) fell by 4.2%. Read more

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On Tuesday, data showed U.S. consumer confidence fell to nearly a year-and-a-half low in July amid lingering worries about higher inflation and rising interest rates. Read more

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

Amazon, which said it would raise Prime delivery and streaming service fees in Europe by up to 43% a year, was the biggest drag on the Nasdaq and S&P 500, while Consumer Discretionary (.SPLRCD ) 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 an interest rate hike of 0.75 percentage points on Wednesday to fight inflation. read more Investors fear that aggressive interest rate hikes by the Fed could tip the economy into recession.

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

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

Microsoft shares were down 0.5% in after-hours trading while Alphabet rose 3% following corporate results. Microsoft ended the regular session down 2.7% and Alphabet ended down 2.3% on the day. Read more

Investors were looking to see if this week’s earnings news from ultra-large-cap companies could help the stock market sustain its recent rally. Read more

According to data from Refinitiv, earnings for S&P 500 companies are expected to have risen 6.2% in the second quarter from the year-ago period.

Also in the regular session, Coca-Cola Co (KO.N) gained 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 announced plans to divest its healthcare business. read more General Electric Co (GE.N) gained 4.6% after the industrial conglomerate beat its revenue and profit estimates.

In other perspectives, the International Monetary Fund again cut its forecast for global growth. Read more

Volume on U.S. exchanges was 9.60 billion shares, compared to an average of 10.93 billion for the full session over the past 20 trading days.

Falling issues outnumbered rising ones on the NYSE by a ratio of 1.73 to 1; on the Nasdaq, a 1.72-to-1 ratio favored decliners.

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

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

Our standards: The Thomson Reuters Trust Principles.

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