Indices fall after Walmart profit warning; Nasdaq down 2 percent

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

NEW YORK, July 26 (Reuters) – U.S. stocks were sharply lower on Tuesday afternoon, with the Nasdaq down more than 2%, as a profit warning from Walmart dragged down retail shares and fueled fears about spending.

Walmart ( WMT.N ) shares fell 8% after the retailer cut its full-year profit forecast late on Monday. Walmart blamed rising food and fuel prices and said it had to cut prices to reduce inventory. read more

Shares of Target Corp ( TGT.N ) fell 3.8% and Amazon.com Inc ( AMZN.O ) fell 5.1%. read more

Amazon also said it would increase fees for delivery and streaming service Prime in Europe by up to 43% a year. read more

Amazon was among the biggest moves on the Nasdaq and S&P 500, while consumer discretionary (.SPLRCD) fell more than 3% and led declines among the S&P 500 sectors.

– The majority of the companies that reported today beat earnings, and that has been the case. But of course there have been some warnings, and that’s what the market is focusing on, says Peter Cardillo, chief market economist at Spartan Capital Securities in New York. .

“Walmart basically pulled the plug, and most retailers are lower across the board.”

Meanwhile, Coca-Cola Co ( KO.N ) rose 1.9% after the company raised its full-year earnings forecast. McDonald’s Corp ( MCD.N ) rose 3% after beating quarterly expectations. read more

A busy week for earnings includes after-hours reports from Alphabet Inc ( GOOGL.O ) and Microsoft Corp ( MSFT.O ). Microsoft fell 3.4% and Alphabet fell 2.9%.

The Dow Jones Industrial Average (.DJI) fell 239.66 points, or 0.75%, to 31,750.38, the S&P 500 (.SPX) lost 52.28 points, or 1.32%, to 3,914.56 and The Nasdaq Composite fell (.2.3IX or 8.3IX). 2.03% to 11,543.29.

The Federal Reserve began a two-day meeting and on Wednesday is expected to announce an interest rate increase of 0.75 percentage points to combat inflation. read more Investors have worried that aggressive interest rate hikes by the Fed could tip the economy into recession.

Earnings from S&P 500 companies are expected to have risen 6.2% for the second quarter from the same period last year, according to Refinitiv data.

Among the week’s heavy economic news, data showed on Tuesday that US consumer confidence fell to a nearly 1-1/2-year low in July, pointing to slower economic growth at the start of the third quarter. read more

Preliminary data for second quarter GDP on Thursday will probably be negative after the US economy fell in the first three months of the year.

Declining issues outnumbered advancing ones on the NYSE by a ratio of 1.82 to 1; on the Nasdaq a 1.51 to 1 ratio favored decliners.

S&P 500 posted 1 new 52-week high and 30 new lows; The Nasdaq Composite recorded 32 new highs and 123 new lows.

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

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