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Thursday, September 23, 2021
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Wall Street skids after weak retail sales, Home Depot results

Wall Street’s main indexes slid on Tuesday (August 17), weighed down by a drop in U.S. retail sales that raised concerns about the economic recovery, as well as by disappointing results from Home Depot .

Almost all of the S&P 500’s sectors were lower, with consumer discretionary the weakest performer.

Home Depot shares fell sharply after the company’s U.S. same-store sales fell short of estimates for the first time in nearly two years as pandemic-fueled do-it-yourself projects tapered off. Shares of rival Lowe’s Companies also dropped.

A report showed that U.S. retail sales fell more than expected in July, as supply shortages depressed motor vehicle purchases and the boost to spending from the economy’s reopening and stimulus checks faded, suggesting a slowdown in growth early in the third quarter.

All three major U.S. indexes ended well lower, after the S&P 500 and the Dow Industrial had previously closed at record highs for five straight sessions.

Unofficially, the Dow Jones Industrial Average fell 279.68 points, or 0.79%, to 35,345.72, the S&P 500 lost 31.37 points, or 0.70%, to 4,448.34 and the Nasdaq Composite dropped 137.58 points, or 0.93%, to 14,656.18.

With the market in a period that has seasonally been weak historically, investors have said stocks may be due for a significant drop, with the S&P 500 yet to experience a 5% pullback this year. On Monday, the S&P 500 closed 100% above its March 2020 low.

Still, market watchers have said that huge amounts of cash held by investors and companies could protect stocks from severe declines, as buyers are quick to look for opportunities to scoop up cheaper shares. In an encouraging sign about the economic rebound, a Federal Reserve report on Tuesday showed production at U.S. factories surged in July.

Investors are looking for signs about when the Fed will rein in its easy money policies, with minutes from the central bank’s latest meeting due on Wednesday, and are watching the resurgence in COVID-19 cases and its impact on the economy.

(Production: Hyeongmi Kim, Soren Larson, Fred Katayama)

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