Stocks slip as Walmart drags down the Dow

  • Stocks slip as Walmart drags down the Dow

Stocks slip as Walmart drags down the Dow

Total revenue for the quarter ended January 25 rose 4.1% to $136.3 billion. Higher bond yields indicate investors expect more risk of inflation, and they also can threaten stock prices by making bonds more appealing versus stocks. The company forecast EPS of $4.75-$5.00 in fiscal 2019, up from $4.42 previous year, and expects solid comparable sales growth to continue, projecting an increase of 2% at Walmart U.S. stores.

"The slowdown reflects a broader challenge at Walmart, which has dominated the retail industry for decades with its extensive store network but is now playing catch up in the e-commerce realm with Amazon, which captures half of all online spending", The New York Times said.

Several big retailers also fell, including Target, which slid $2.22, or 3 percent, to $72.86. "We're making real progress putting our unique assets to work to serve customers in all the ways they want to shop, and I want to thank our associates for their great work this past year", said said Doug McMillon, president and CEO, Walmart. That compares with $3.76 billion, or $1.22 per share, in the year-earlier period.

The spark for those falls was a rise in USA bond yields, however, and benchmark 10-year Treasury bond yields hit four-year highs of 2.8950 per cent on Tuesday.

In corporate news, Walmart -9.3% after missing Q4 earnings estimates and lowering its FY 2019 profit guidance, but Rite Aid +3.2% on news that privately-held Albertson's will acquire the remaining portion of the company that is not already being acquired by Walgreens Boots Alliance. That marked the 14th consecutive quarter of increases.

Japan's Nikkei 225 index climbed 0.6 percent to 22,064.55 and Hong Kong's Hang Seng advanced 1.0 percent to 31,169.79.

The company said that the strength was "broad-based" across all merchandise categories, and that holiday sales were solid.

The Bentonville, Arkansas-based company had been getting a tailwind from its acquisition of Jet.com, an online upstart that it bought in 2016.

The S&P technology index gained 0.3 as the sole major S&P sector on the plus side, buoyed by a gain of almost 2 percent in the semiconductor sector. The company announced earlier this month that it was offering free shipping for premium members and simplifying its membership tiers.

Last month, Sam's Club began closing 63 USA clubs while turning a dozen of them into warehouses for digital sales, to speed deliveries.

While the focus during the earnings season has previously been in the technology sector it has now moved to the retail industry with particular attention directed at Walmart.

Shares fell $9.86 to $94.91. Walmart's Chief Financial Officer Brett Biggs said that it expects a cash benefit of $2 billion for the year.