Walmart Warnings & Big Banks Fall – US Market Wrap
Stocks fell from record highs after the world’s largest retailer issued a disappointing forecast, adding to concerns about the economy’s main engine.
Walmart, the first big-box retailer to report earnings after the holidays, fell 6.5%. The company’s CFO acknowledged “uncertainties related to consumer behavior and global economic and geopolitical conditions.” That comes just days after retail sales showed an abrupt decline by consumers. A drop in bank stocks weighed on trading, with JPMorgan and Goldman Sachs both falling more than 3.8%.
During tough economic times, retailers such as Walmart tend to do well. It’s also true that Walmart typically begins the year with conservative guidance. However, consumers are dealing with stubborn prices and high borrowing costs, and many are turning to credit cards and other debt to help them spend – with an increasing number of those loans going bad.
The S&P 500 fell 0.4%. The Nasdaq 100 declined 0.5%. The Dow Jones Industrial Average fell 1%. The Russell 2000 fell 0.9%. The KBW Bank Index declined 2.4%. A measure of the Magnificent Seven megacaps dropped 0.5%.
The yield on 10-year Treasuries fell three basis points to 4.5%. The Dollar declined 0.7%. The yen led gains in major currencies on bets that the Bank of Japan will raise interest rates sooner rather than later.
