Market Update: U.S. Stocks Snap Six-Day Rally as Dow Tumbles 254 Points
U.S. stocks declined sharply on Tuesday following the holiday weekend, as rate-hike jitters and a steep drop in Walmart shares weighed on investor sentiment.
The Dow Jones Industrial Average declined by as much as 335 points on Tuesday. It would later pare losses near the close to finish down 254.63 points, or 1%, at 24,964.75.
Twenty-five of 30 index members recorded losses, with Walmart (WMT) plunging more than 10%. The retailing giant reported adjusted earnings of $1.33 per share in the most recent quarter, missing forecasts of $1.37. It also reported a 23% drop in e-commerce sales, raising fresh worries about its short-term outlook.
The broader S&P 500 Index fell 0.6% to finish at 2,716.26, with ten of 11 sectors reporting declines. The steep drop in Walmart dragged the consumer staples category down by more than 2%. Healthcare, telecommunication services and utilities also finished sharply lower.
Meanwhile, the technology-driven Nasdaq Composite Index pared losses to finish at 7,2434.31, where it was down 0.1% from Friday’s close.
A measure of 30-day volatility known as the CBOE VIX rose on Tuesday for a second straight session, climbing more than 6% to close at 20.69. The so-called “fear index” is trading right around the historic average following an unprecedented surged in volatility at the beginning of February.
Wall Street Rounding Out Solid Earnings Quarter
Despite Walmart’s miss, corporate earnings have largely outpaced forecasts during the fourth quarter. With 80% of S&P 500 companies reporting, three-quarters have posted better than expected earnings, according to financial research firm FactSet. More than three-quarters (78%) have also reported revenue surprises, the largest such figure since FactSet began tracking this category in Q3 2008.
S&P 500 companies are on track for a year-over-year blended earnings growth rate of 15.2%, which is the highest since 2011.
Cryptocurrencies Hold Steady Above $500 Billion
The cryptocurrency market held relatively steady on Tuesday, with the total market cap well north of $500 billion. The market peaked at $516.8 billion on Tuesday, and was last seen around $508.8 billion.
Bitcoin and Litecoin were the biggest gainers on Tuesday while the other major reported modest declines. Bitcoin’s market cap crossed $200 billion as the coin’s value approached $12,000 for the first time in three weeks.
Litecoin also climbed nearly 10% to $246 following a hard fork of the digital currency this weekend. Litecoin continues to be one of the market’s best performers, having added more than 53% over the last five days.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.