S&P, Dow falter after six days of gains as Walmart weighs
By FLONAD News
By Sruthi Shankar, Aparajita Saxena.
(Reuters) – The S&P and the Dow slipped after six straight days of gains on Tuesday, hurt by disappointing quarterly results from Walmart and a rise in bond yields.
Shares of the world’s biggest brick-and-mortar retailer (WMT.N) fell more than 9 percent after the company reported a lower-than-expected profit and posted a sharp drop in online sales growth during the holiday period.
Target (TGT.N) dipped 2.6 percent, while Costco Wholesale (COST.O) dropped 1.6 percent, dragging the S&P consumer staples .SPLRCS index down 1.62 percent.
Amazon (AMZN.O) was up 0.9 percent.
Other big decliner was Qualcomm (QCOM.O), which fell nearly 4 percent after the chipmaker raised its offer to buy NXP Semiconductors NV (NXPI.O) to $127.50 per share from $110. NXP shares rose 6.2 percent.
“The markets were indicating a lower open last night and an increase to the downside came after Walmart reported an earnings miss. We’re also seeing yields move up above the 2.80/2.91, and that has markets a little bit concerned,” said Robert Pavlik, chief investment strategist at SlateStone Wealth in New York.
At 9:37 a.m. ET, the Dow Jones Industrial Average .DJI was down 0.32 percent at 25,138.98 and the S&P 500 .SPX fell 0.17 percent to 2,727.46. The Nasdaq Composite .IXIC was down just 0.01 percent, at 7,238.57.
The S&P 500 racked up its biggest weekly increase in five years last week, easing fears that a deeper market correction was taking hold after a handful of large daily losses at the start of February.
The spark for those falls was a rise in U.S. bond yields, however, and benchmark 10-year Treasury bond yields US1OYT=RR hit four-year highs of 2.8950 percent on Tuesday.
The S&P financial index .SPSY was up 0.7 percent, led by gains in Wells Fargo (WFC.N) and JPMorgan & Chase (JPM.N).
“The market views rising interest rates as potentially getting a little bit ahead of themselves. The bond market is oversold, the yield environment is overbought, but that has not stopped the slowdown in equities,” said Pavlik.
Minutes from the Federal Reserve’s January meeting on Wednesday will be at the center of this week’s trade, eyed for more clues on the central bank’s view on inflation and the pace of future interest rate increases.
- Related Topics: