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Indexes fall as Walmart’s profit warning scares investors

Indexes fall as Walmart's profit warning scares investors
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Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 21, 2022. REUTERS/Brendan McDermid

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  • Walmart Cuts Profit Guidance; News hits retailers
  • McDonald’s as sales, profit estimated upwards
  • Coca-Cola rises on forecast increase
  • Indices: Dow down 0.7%, S&P 500 down 1.2%, Nasdaq down 1.9%

NEW YORK, July 26 (Reuters) – US stocks ended sharply lower on Tuesday as a profit warning from Walmart dragged retail stocks lower and exceptionally weak consumer confidence data also fueled fears over spending.

Walmart (WMT.N) Shares fell 7.6% after the retailer lowered its full-year earnings guidance late Monday. Walmart blamed rising prices for groceries and fuel and said it had to cut prices to reduce inventory. Continue reading

Target Corp Stock (TGT.N)fell 3.6% and Amazon.com Inc (AMZN.O) fell 5.2% while the S&P 500 retail index (.SPXRT) fell by 4.2%. Continue reading

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On Tuesday, data showed that US consumer confidence fell to nearly a 1-1/2 year low in July amid ongoing concerns about higher inflation and rising interest rates. Continue reading

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

Amazon, which announced it would increase fees for delivery and streaming service Prime in Europe by up to 43% per year, was the biggest drag on the Nasdaq and S&P 500 while it was cyclical consumers (.SPLRCD)fell 3.3%, leading to declines among sectors in the S&P 500. Continue reading

The Federal Reserve started a two-day meeting and is expected to announce a 0.75 percentage point rate hike on Wednesday to fight inflation. Continue reading Investors worry that aggressive rate hikes by the Fed could plunge 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.

Microsoft shares fell 0.5% in after-hours trading, while Alphabet rose 3% according to the companies’ earnings. Microsoft ended the regular session down 2.7% and Alphabet ended the day down 2.3%. Continue reading

Investors wanted to see if this week’s earnings reports from mega-cap companies could help the stock market extend its recent rally. Continue reading

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

Also during the regular session, Coca-Cola Co (KO.N) gained 1.6% after the company raised its full-year sales guidance. McDonald’s Corp (MCD.N) rose 2.7% after beating quarterly expectations. Continue reading

3M Co (MMM.N) rose 4.9% after the industrial giant announced it would spin off its healthcare business. Continue reading General Electric Co (GENE)gained 4.6% after the industrial conglomerate beat sales and earnings estimates.

In other outlooks, the International Monetary Fund has again lowered global growth forecasts. Continue reading

Volume on US exchanges was 9.60 billion shares compared to the average of 10.93 billion for the entire session over the past 20 trading days.

Declining issuance outweighed the NYSE by a ratio of 1.73 to 1; on the Nasdaq, and the 1.72 to 1 ratio favored decliners.

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

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

Our standards: The Thomson Reuters Trust Principles.

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