Wall Street ends down after disappointing retail sales

by Lewis Krauskopf, Devik Jain and Ambar Warrick

(Reuters) – The New York Stock Exchange ended lower on Tuesday after the release of data showing a larger-than-expected drop in US retail sales in July, fueling fears over the recovery of the economy, while that the disappointing results of Home Depot also weighed.

The Dow Jones index lost 0.79%, or 282.12 points, to 35,343.28 points.

The larger S & P-500 lost 31.63 points, or 0.71%, to 4,448.08 points.

The Nasdaq Composite fell 137.58 points (0.93%) to 14,656.18 points.

After five consecutive days of rising, the Dow Jones and the S & P-500 both declined by around 1%. Almost all sectors of the S & P-500 ended the session in the red, with only healthcare registering gains.

Data released today shows retail sales in the United States declined more than expected last month, as supply issues disrupted auto sales and the rebound in consumption spurred by the deconfinement has faded.

While a survey released on Friday showed worsening US consumer sentiment, falling retail sales “fuel concerns about possible weaker demand,” commented Katie Nixon, chief investment officer at Northern Trust Wealth Management.

Noting that the market column remained “strong,” she added that the context, “with negative macroeconomic data and markets hitting record highs with very high valuations,” made for “vulnerability” to such bad news.

Traditionally a low, August could see some big pullbacks, according to investors, as the S & P-500 has never declined 5% or more this year.

Observers believe, however, that funds held by investors and companies could protect securities against severe falls on Wall Street. An encouraging sign for the strength of the economic recovery, manufacturing output in the United States rose in July, according to a survey released on Tuesday.

Investors are now awaiting the minutes of the US Federal Reserve’s (Fed) July meeting on Wednesday, looking for signs of the central bank’s intentions regarding its support measures.

Side values, Home Depot fell 4.3% after reporting for the first time in nearly two years of quarterly results below expectations.

Walmart was little changed after the announcement of an upward revision of its annual forecast for same-store sales in the United States, following quarterly results that beat consensus.

(French version Jean Terzian)