Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


While you were sleeping: Slump in Walmart weighs on Dow

While you were sleeping: Slump in Walmart weighs on Dow

By Margreet Dietz

Feb. 21 (BusinessDesk) - Wall Street was mixed, as a slide in Walmart shares weighed on the Dow, while US Treasuries slid amid this week’s flood of government debt auctions.

In 1.36pm trading in New York, the Dow Jones Industrial Average slid 0.6 percent. However, the Nasdaq Composite Index added 0.5 percent. In 1.20pm trading, the Standard & Poor’s 500 Index slipped 0.1 percent.

On Monday US financial markets were closed for the President’s Day holiday.

Sentiment is mixed, too. A Strategas Research Partners poll, conducted February 16, of about 500 institutional investors, showed 57 percent expect the S&P 500 Index to break the intraday low of 2,533 reached on February 9, while the rest say the market has bottomed for the year after a two-week selloff sent the index to its first 10 percent correction since 2016, Bloomberg reported.

The Dow fell, led by a 9.3 percent plunge in shares of Walmart.

Shares of Walmart tumbled after the world’s largest retailer posted a quarterly profit that failed to meet expectations and its online sales growth slowed amid intensifying competition from Amazon.

“The big thing is the miss by Walmart, driven largely by its online business, and that’s having investors scratching their heads,” Kim Forrest, senior equity research analyst with Fort Pitt Capital Group in Pittsburgh, told Reuters. “The assumption is that we’re all going to have one store and that is Amazon.”

Walmart said its US online sales rose 23 per cent in the quarter ended January 25. That’s well below the pace of at least 50 percent growth in previous quarters. The company forecast a 40 percent pace of growth for its fiscal 2019 year.

The company’s full-year profit guidance, of US$4.75 to US$5.00 per share, also fell short of analysts’ estimates.

"We still believe Walmart has more work to do to widen its e-commerce customer base," GlobalData Retail Managing Director Neil Saunders said in response to Tuesday's earnings report, CNBC reported.

"There are many demographics, especially younger and professional segments, for whom Walmart is not the destination of choice online," according to Saunders. "This is a tough nut for Walmart to crack, and one that it can only break by more heavily marketing its services and proposition.”

Shares of Amazon traded 2.2 percent stronger as of 1.26pm in New York.

US Treasuries declined amid a flood of government debt auctions this week, sending the yield on the 10-year note three basis points higher to 2.90 percent, while the 2-year yield also added three basis points to 2.22 percent, the highest since 2008, according to Bloomberg.

“The immediate question is what level of yields will be required for that additional supply to be digested, and of course beyond that how the deficit will actually develop,” John Davies, a US interest-rate strategist at Standard Chartered, told Bloomberg.

In Europe, the Stoxx 600 Index ended the session with a 0.6 percent advance from the previous close. France’s CAC40 Index also gained 0.6 percent, while Germany’s DAX Index rose 0.8 percent.

The UK’s FTSE 100 index inched 0.01 percent lower, as a 4.6 percent drop in shares of BHP Billiton offset a 5 percent rally in shares of Evraz.



© Scoop Media

Business Headlines | Sci-Tech Headlines


Working Group Update: Mycoplasma Bovis Eradication Making Substantial Progress

International experts are impressed by New Zealand’s efforts to eradicate the cattle disease Mycoplasma bovis and are more confident the campaign is working... More>>


Immigration: Arrest For Human Trafficking And Slavery

It is alleged that the man, who is a Samoan national and New Zealand resident, has been regularly bringing Samoan nationals to New Zealand to work illegally for him in the horticultural industry. More>>


NZ's Space Programme: Rocket Lab Launches NASA Satellites

On Sunday, December 16, 2018 UTC, Rocket Lab’s Electron launch vehicle successfully lifted off from Rocket Lab Launch Complex 1 on New Zealand’s Māhia Peninsula. More>>


Conservation Plan: Celebrity Kiwi Released Into The Wild

One of the nation's most famous kiwi was among four released onto Taranaki Maunga... Atara, a five-year-old male, hatched while David Attenborough's cameras were rolling. More>>