Stocks on Wall Street dropped on Tuesday, snapping the Dow’s and S&P 500’s five-day streak of record closing highs. Disappointing earnings results from blue chip Home Depot and a bigger-than-expected drop in retail sales last month raised concerns about the economic recovery.
That dour retail news slammed economically sensitive consumer cyclical stocks, the day’s biggest losers amid a broad sell-off.
Weighed down by Home Depot, the Dow fought back from a deficit of nearly 500 points but still ended eight-tenths of a percent lower. The S&P shed seven-tenths percent, and the Nasdaq declined nine-tenth percent.
Vespula Capital CEO Jeff Tomasulo said investors used the economic data as an excuse to cash in.
“When you got this retail sales number today, I felt like it was hey, this is a reason why we can actually take some profits now again. We're at the end of the summer. You're gonna see low volume so these moves might be more exaggerated than the normal.”
Home Depot shares lost more than 4% after the home improvement retailer’s comparable store sales fell short of analysts targets for the first time in almost two years. The do-it-yourself-projects that cooped up homeowners had embarked on during the health crisis have tapered off.
Walmart, on the other hand, hiked its sales forecast after reporting a stronger-than-expected increase in domestic same-store sales. But its shares shed their earlier gains to finish nearly flat.
On Wednesday, investors will get results from their rivals: Target and Lowe's.