The stock market was falling Tuesday after
warned that inflation would eat into its earnings as consumer spending habits changed.
Dow Jones Industrial Average
futures have slipped 128 points, or 0.4%, while
futures had fallen 0.4%, and
futures had declined 0.5%.
“Stock futures are modestly lower on soft retailer earnings from yesterday,” writes Tom Essaye, founder of Sevens Report Research.
Walmart said that it is expecting earnings per share to drop about 12% for the full year. Sales will continue to grow as it raises prices on food and consumables, but that will eat away at demand for other types of merchandise, forcing Walmart to slash prices in that area. Overall, the company expects its operating margin to be just under 3.9% for the full year, down from 4.5% seen at the end of last fiscal year, according to FactSet. The stock is down 9.7% in premarket trading.
“We expect more margin pain across retail as food and gas inflation catalyze markdowns,” writes Cowen analyst Oliver Chen.
Indeed, other retail stocks are getting hit.
(HD), Lowe’s (LOW), and
(TJX) were down 5.1%, 2.5%, 2.1%, and 4%, respectively.
Walmart, though, is yesterday’s news and the market will soon shift its attention to the closing bell, when
(GOOGL) will report. Alphabet’s earnings will give the market a read on the health of advertising spending, while Microsoft should give investors a sense of how spending on tech is holding up. Together, the two stocks are larger enough to move the indexes, as their combined market capitalizations account for about 10% of the S&P 500.
Hopefully, it won’t be as scary as Walmart’s news.
Here are five stocks on the move Tuesday:
(BABA) gained 4% in premarket trading, after the New York-listed Chinese tech giant said its board had authorized management to apply for a primary listing in Hong Kong. The move, which is expected to be completed by the end of the year, would leave
as a dual-primary-listed company in New York and Hong Kong.
) lost 7% in the premarket after the Swiss bank reported weaker-than-expected quarterly earnings. Second-quarter earnings per share (EPS_ of 61 cents fell short of the 70 cents expected by Wall Street, while net attributable profit of $2.1 billion missed estimates of $2.4 billion. The bank was impacted by lower revenue in its key wealth management business.
(GM) fell 1% in premarket trading after the auto giant reported second-quarter profit below expectations despite revenue that outpaced analysts’ estimates. GM notched adjusted earnings per share of $1.14, below the $1.33 expected by Wall Street, while revenue rose to $35.8 billion, ahead of the $33.2 billion estimated by analysts.
(LOGI) fell 0.5% in the premarket—while the PC and gaming peripherals group’s Zurich-listed stock (LOGNI.Switzerland) dropped 2%—following the company’s earnings report. Logitech notched softer-than-expected fiscal first-quarter results and slashed its full-year guidance, providing new evidence of a slowdown in demand for consumer electronics.
Write to Jack Denton at email@example.com