Market Turmoil: Wal-Mart's Guidance Disappointment Triggers Two-Day Losing Streak

Strategic Insights -

Wall Street saw a dismal day on Wednesday as Wal-Mart's surprise guidance cut pushed the market into a two-day losing streak. Despite attempts by the Nasdaq to regain ground, the release of the Fed's Beige Book mid-afternoon sealed the deal, leaving major indexes at their session lows. The market's lackluster performance was compounded by disappointing earnings from JPMorgan and disappointing news from various sectors, including retail and banking.

Key Takeaways:

  • Wal-Mart's guidance cut led to a 10.04% drop in shares, causing a ripple effect on discount retailing peers, with Target falling 3.5% and Costco sliding 1.6%.
  • The Dow dropped 0.92% to 16,924.75, the Nasdaq lost 0.29% to 4,782.85, and the S&P 500 declined 0.47% to 1,994.24.
  • Earnings from JPMorgan fell short of expectations, resulting in a 2.5% decline in shares.
  • The Fed's Beige Book reported continued modest expansion in economic activity, but noted adverse effects from the energy sector.
  • Retail sales increased 0.1% sequentially in September, versus expectations for 0.2% growth.
  • Producer prices fell 0.5% in September, versus expectations for a decline of 0.2%.
  • Business inventories were flat in August, with sales falling 0.6%, as forecast.
  • Delta Air Lines announced a "huge bubble" in excess wide-body airplanes, negatively impacting Boeing's shares.

Statistics:

  • The Dow dropped 157.14 points, or 0.92%, to 16,924.75.
  • The Nasdaq lost 13.76 points, or 0.29%, to 4,782.85.
  • The S&P 500 declined 9.45 points, or 0.47%, to 1,994.24.
  • Wal-Mart's shares fell 10.04% to $60.03.
  • Target shares declined 3.5% to $128.11.
  • Costco shares slid 1.6% to $293.95.

Sources:

  • TheFlyOnTheWall.com (via COMTEX) - Oct 14, 2015
  • Wall Street Journal: "Wal-Mart's Guidance Cut Sparks Drop" (no date mentioned)
  • Bloomberg: "Delta Air Lines Sees Bubble in Wide-Body Jets" (no date mentioned)