Traders on the floor of the New York Stock Exchange.
Source: NYSE
U.S. stock indices fell on Tuesday as retail sales fell in July, another sign that the economy may slow down a bit amid a Covid resurgence.
Of course, the losses on Tuesday were small and the Dow Jones Industrial Average and S&P 500 closed at record levels on Monday.
The Dow fell 330 points, or 0.9%. The S&P 500 lost 0.8% and the Nasdaq Composite lost 1%.
Retail sales fell 1.1% in July, a decline more than the 0.3% decline expected by Dow Jones’ polls. The Census Bureau corrected the June figure to a jump of 0.7%.
Dow member Home Depot was down more than 3% after posting results for the second quarter. While quarterly earnings exceeded estimates, sales in the same store rose 4.5% during the reporting period, below the consensus estimate of 5% of analysts surveyed by StreetAccount. In the United States, sales in the same stores only increased 3.4%.
Walmart stocks declined even after second-quarter earnings beat estimates. The retailer made cautious recommendations; The company said it will make between $ 1.30 and $ 1.40 per share this quarter, while the consensus analyst estimate is $ 1.32, according to StreetAccount.
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The Dow and S&P 500 closed at record highs in their fifth consecutive positive session on Monday. The move of the S&P 500 during Monday’s session marked a milestone as the benchmark index doubled from its pandemic closing low on March 23, 2020. This is the fastest doubling of the bull market since World War II, according to calculations by CNBC.
As stocks have rallied from their pandemic lows at a rapid pace, and some on Wall Street expect further gains.
“We remain bullish on equities (especially cyclicals / value) thanks to a strong earnings season, signs of diminishing risk from the delta variant and a normalization of the bond-equity correlation,” JPMorgan wrote in a customer announcement on Monday.
Monday’s action came from China despite disappointing economic data. The country’s retail sales rose 8.5% year-over-year in July, below Reuters’ expected 11.5% increase.
Goldman Sachs noted that the impact would likely be localized.
“The soaring growth in COVID cases is likely to fuel the slowdown in China and the decline in manufacturing sentiment, but the economic impact – in the US and Europe at least – is unlikely to be large,” the company said on Monday a message to customers.
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