Stocks tumble, close in the red
NEW YORK - Stocks took a tumble on Tuesday as the U.S. market closed in the red after a six-day winning streak.
The Standard & Poor's 500 index fell 15 points, or 0.6 percent, to close at 2,716. The Dow Jones industrial average fell 254 points, or 0.6 percent, to 24,964. The Nasdaq composite traded in positive territory for much of the day, but lost 5 points to end at 7,234.
In recent days, U.S. indices bounced back from some of their biggest point losses in years. Volatility spiked as investors concerned about the outlook for inflation and the future path of Federal Reserve rate hikes switched gears.
Overall, fourth-quarter earnings have delivered strong results -- one reason investment firm BlackRock upgraded their outlook for U.S. equities in the short-term.
" U.S. valuations look slightly more attractive after the February stock market swoon. Economic strength was already changing the tone of earnings momentum, but U.S. tax cuts and government spending plans lit a fire under the trend," BlackRock chief investment strategist Richard Turnhill said in a note. "We see the strong U.S. earnings momentum persisting in the short term and leading to higher returns."
One notable earnings outlier was Walmart (WMT) whose shares slumped 7 percent after the company reported a slowdown in online sales and earnings that missed analysts' forecasts. Still, the world's largest retailer announced better-than-expected sales overall and higher customer counts as the it overhauls its stores and its online services.
The mixed results reflect Walmart's continued challenges to fight online leader Amazon (AMZN) even as it makes huge investments in both its digital business and stores. E-commerce sales in its U.S. business slowed to 23 percent during the fourth quarter, from 50 percent in the third quarter.
Walmart blamed some of the slowdown on "operational challenges" Still, the company finished the year with more than 40 percent growth in online sales and it expects that pace to continue for the coming year.
Gap (GPS) fell 5 percent after saying the head of the Gap brand, Jeff Kirwan, will leave the company. In a statement, the company said a search for a replacement is underway and current Gap Executive Vice President Brent Hyder will fill in as interim CEO.
Privately-held Albertsons Companies, one of the largest grocery chains in the U.S., is offering either a share of its stock and $1.83 in cash or slightly more than a share for every 10 shares of Rite Aid (RAD). A deal value was not disclosed Tuesday by the companies. Shares of Rite Aid, which have shed more than half their value over the past year, jumped 40 cents, or 18.8 percent, in premarket trading after the deal was announced.
NXP Semiconductors (NXPI) rose 6 percent after Qualcomm (QCOM) raised its offer to buy the company. The company has reported raised its offer to around $43 billion, from an initial $38 billion. The deal has come under regulatory scrutiny in Europe, and the offer comes as Qualcomm is facing an attempted takeover from Broadcom (AVGO).
Bond prices fell. The yield on the 10-year Treasury rose to 2.89 percent.
