Market Snapshot: Dow drops nearly 250 points as worries about big tech earnings weigh on stocks

by | Jul 26, 2022 | Stock Market

U.S. stocks retreated Tuesday after Wal-Mart cut its profit guidance, while anxieties about earnings reports from American tech behemoths like Alphabet Inc. and Meta Platforms Inc. helped to undermine the broader market. What’s happening
The Dow Jones Industrial Average
fell 247 points, or 0.8%, to 31,747

The S&P 500
was down 51 points, or 1.3%, at 3,916.

The Nasdaq Composite
shed 233 points, or 2%, to trade at 11,549.

On Monday, the Dow rose 91 points, or 0.3%, while the S&P 500 ticked up 0.1% and the Nasdaq Composite lost 0.4%.

What’s driving markets Walmart
late Monday cut its profit outlook, saying inflation on food has caused it to conduct more markdowns in apparel. Its shares fell 8.6% to lead Dow decliners Tuesday, while other retail stocks also sunk. The SPDR S&P Retail ETF
fell 4%. The retailing behemoth’s insight into how inflation is constraining consumption rattled markets by offering more cold, hard evidence that the engine of the U.S. economy — that is, consumer spending — is being constrained by inflation. “You have this anecdotal data and this view that things are slowing, but until it hits you in the face, then it becomes very clear, and then you have to reassess. I think we’re in ‘reassess’ mode right now,” said Eric Merlis, co-head of global markets at Citizens. Read: What you need to know about the Fed, earnings and GDP ahead of a busy week for markets As U.S. stocks fell to lows of the session in afternoon trading, analysts blamed jitters ahead of earnings reports due from some of the biggest American tech companies, many of which are reporting either on Tuesday, or later in the week. Investors are awaiting a flurry of reports, including tech titans Alphabet Inc.
and another Dow component, Microsoft Corp.
which will report after the close on Tuesday. Later in the week, investors will hear from other megacap tech names including Meta Platforms Inc.
and Inc.
among many others during the busiest week of the quarter for earnings reports from S&P 500 members. Already, anxieties around these reports appeared to be contributing to Tuesday’s losses, Merlis said. “There’s concern advertising spending will be much weaker,” he added, in reference to digital advertising heavyweights Alphabet and Meta. Meta shares were down more than 4% Tuesday, while Amazon was off more than 5%. The weakness in megacap tech Tuesday helped drive the Nasdaq to underperform the S&P 500 and the Dow. Consumer discretionary shares — an S&P 500 sector that’s dominated by Amazon and Tesla Inc.
— was the worst performer among the S&P 500’s 11 sectors, while defensive stocks like health-care and utilities were the only S&P 500 se …

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