U.S. Stocks Open Mixed After Data; Weak Earnings
NEW YORK (MarketWatch) -- U.S. stocks were mixed on Tuesday, after weak results from Wal-Mart Stores Inc., the world's largest retailer, as well as a weak outlook from home-improvement retailer Home Depot Inc., fueled concerns about the health of U.S. consumers.
"Wal-Mart's lowered guidance heightened our fear of a consumer spending slowdown perhaps coming to fruition," said Art Hogan, chief market strategist at Jefferies & Co.
The Dow Jones Industrial Average fell 69 points to 13,171, as 19 of its 30 components fell. Big drops in shares of Wal-Mart and Home Depot Inc. offset strength in the Dow's technology components, such as Microsoft Inc. and Intel Corp. .
The S&P 500 index rose 0.5 points to 1,452, and the Nasdaq Composite rose 4.8 points to 2,547.
Trading volumes showed 210 million shares exchanging hands on the New York Stock Exchange and 217 million trading on the Nasdaq stock market. Declining issues topped gainers by 16 to 13 on the NYSE, and by 13 to 12 on Nasdaq.
Technology shares earlier received a lift as investors await key earnings from tech bellwether Applied Materials Inc. after the close.
Consumer woes?
Wal-Mart , the nation's largest retailer, cut its earnings outlook for the year, saying second-quarter performance was less than expected and many of its customers are under economic pressure. Its stock fell 4.8%.
Wal-Mart, like many of its rivals, has been battling a number of external issues putting a dent in consumers' budgets that include the housing slowdown, higher interest rates and a crunch on credit.
Home Depot reported a 15% profit decline and projected weakness in the housing market would extend into 2008. Its stock was off 1.1%.
Rate cuts?
With the market worried about a credit crunch and economic growth, some investors are now hoping that the Federal Reserve will be able to cut interest rates sooner than later. Tuesday's data helped somewhat in that regard.
The Labor Department reported a larger-than-expected 0.6% increase in wholesale prices in July, led by a 2.5% rise in energy prices. But excluding food and energy, the core producer price index rose 0.1%, as expected.
And, the U.S. trade deficit narrowed unexpectedly by 1.7% in June to $58.1 billion, the Commerce Department said.
And helping to rekindle concerns about financial markets, UBS fell almost 2% after Europe's largest bank reported a 79% hike in second-quarter profit, but warned earnings in the second-half would be lower than last year.
Other markets
The U.S. dollar rose against international peers, following data showing worse-than-forecast euro-zone economic growth and slower-than-forecast U.K. inflation.
Crude-oil futures rose 50 cents to $71.79 a barrel.
The dollar rose against international peers after data showing worse-than-forecast euro-zone economic growth and slower-than-forecast U.K. inflation.
On Monday, Wall Street reversed early gains to end slightly lower amid worries over when and where the next credit-related trouble would hit. The Dow industrials ended 3 points lower, the S&P 500 was down a fraction of a point and the Nasdaq Composite declined 2.6 points.
By Kate Gibson