WalMart shares drop more than 10% following earnings miss
U.S. stocks snapped a six-day winning streak on Tuesday, 20 Feb 2018 with the Dow and S&P 500 weighed down by a steep loss for Walmart as investors also watched climbing bond yields, which could make equities less attractive at current levels.
The Dow Jones Industrial Average fell 254.63 points, or 1%, to end at 24,964.75. The S&P 500 dropped 15.96 points, or 0.6%, to 2,716.26 and the Nasdaq Composite Index shed 5.16 points to 7,234.31. The declines ended a six-day string of gains for the Dow and S&P.
Last week, the Dow and S&P 500 each gained 4.3%, while the Nasdaq leapt 5.3%, with all three gauges snapping a two-week losing streak. The Dow's weekly advance was its largest since November 2016, while the S&P's was its best since January 2013. The Nasdaq posted its biggest one-week gain since December 2011.
10 of 11 S&P 500 sectors finished Tuesday in the red, with the consumer staples sector leading the retreat following Wal-Mart's disappointing earnings. The utilities, telecom services, health care, industrials and real estate sectors also finished with losses of at least 1.0%.
On Tuesday, Walmart shed 10.2% after its fourth-quarter adjusted earnings per share missed forecasts. The stock, a Dow component, was a drag on the blue-chip gauge, and posted its biggest one-day percentage drop since Jan. 8, 1988.
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In other corporate news, Dow component Home Depot reported better-than-expected earnings for the fourth quarter, and privately-held Albertsons announced it will be purchasing the remaining portion of Rite Aid --the portion that isn't already being acquired by Walgreens Boots Alliance to form a new publicly traded company.
Wednesday's release of minutes from the Federal Reserve's January policy meeting, the last chaired by Janet Yellen, will be combed for clues to the central bank's thinking on interest rates. ALso looking ahead, Philadelphia Federal Reserve Bank President Patrick Harker and Minneapolis Federal Reserve Bank President Neel Kashkari are due to deliver speeches this week.
Investors didn't receive any economic data on Tuesday. However, on Wednesday, they will receive several reports, including the weekly MBA Mortgage Applications Index at 7:00 AM ET, Existing Home Sales for January, at 10:00 AM ET, and the minutes from the January FOMC meeting at 2:00 PM ET.
Commodity prices lost ground as the dollar sprung higher following last week's sharp decline, which has mostly extended a protracted downtrend for the commodity-pegged currency. The ICE Dollar Index was up 0.6% to 89.724, as the greenback made strides against the euro, pound and yen. A weaker dollar can boost commodities priced in dollars, because it makes them cheaper to buy for holders of other currencies.
Bullion prices ended lower at Comex on Tuesday, 20 Feb 2018 at Comex. Gold prices were clobbered on Tuesday, with the commodity booking its sharpest daily decline in more than a year, against a backdrop of a strengthening dollar and stabilizing equities.
April gold fell $25.10, or 1.9%, to $1,331.20 an ounce, marking the sharpest drop for actively traded futures since Dec. 14, 2016, when gold sank by $33.90, or 2.9%. March silver dropped 27.4 cents, or 1.6%, to $16.438 an ounce.
Oil futures posted a mixed finish on Tuesday, 20 Feb 2018 at Nymex with the U.S. benchmark gaining ground on its global counterpart thanks to Canadian pipeline problems. West Texas Intermediate futures for April delivery rose 24 cents, or 0.4%, to close at $61.79 a barrel. Brent crude, the global benchmark, fell 42 cents, or 0.6%, to settle at $65.25 a barrel.
The narrowing of the spread between the two benchmarks turns in large part on what's occurring in Cushing, Okla., the Nymex delivery hub for WTI futures. Data from the Energy Information Administration released on Feb. 14 showed the amount of oil in Cushing dropped to 32.7 million barrels in the week ended Feb. 9, from 36.3 million the previous week.
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