U.S. stocks edged lower Tuesday, hurt by Walmart Inc. cutting profit guidance ahead of a wave of corporate earnings reports this week, while the International Monetary Fund warned of the potential for a sharp global slowdown.What’s happening
The Dow Jones Industrial Average
fell 90 points, or 0.3%, to 31,900.
The S&P 500
as down 32 points, or 0.8%, at 3,935.
The Nasdaq Composite
shed 177 points, or 1.5%, to trade at 11,605.
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. Shares fell 8.6% to lead Dow decliners, while other retail stocks also sunk. The SPDR S&P Retail ETF
fell 4%. “Retail is under pressure as Walmart sent elevated concerns about the health of the consumer by slashing their outlook. I view this as more of a retail-specific issue, rather than a major consumer concern,” said Lindsey Bell, chief markets and money strategist at Ally, in an email. “This is another reminder how shifting dynamics in consumer preferences and supply chain issues are impacting retailers in an outsized way,” she said. Adding to the gloom over the outlook, the International Monetary Fund warned Tuesday that the global economy is facing the possibility of a severe downturn that would rank in the bottom 10% of outcomes since 1970. In an update to its closely-followed World Economic Outlook report, the IMF trimmed its baseline forecast for global economic growth to 3.2% in 2022, 0.4 percentage point lower than in the April report. In 2023, the IMF projected global output at just 2.9%. For the U.S., the IMF is projecting 2.3% growth this year, down 1.4 percentage points from the April forecast. For 2023, the IMF is now projecting a slim 1% growth rate, down 1.3 percentage points from April. Read: Analysts on Walmart’s profit warning: Consumers are buckling under inflation pressure and draining their COVID reserves Investors were assessing a massive slate of earnings, including General Motors Co.
and Dow components McDonald’s Corp. MCD and Coca-Cola Co.
and after the close, tech titans Alphabet Inc.
and another Dow component, Microsoft Corp.
“Since expectations were set so low going into this earnings season, the underlying theme so far has been that the situation is not quite as dire as many feared. If the tech juggernauts fit this profile, the market could breathe a collective sigh of relief,” said Marios Hadjikyriacos, senior investment analyst at XM, in emailed comments. See: Big Tech earnings are about t …