Nov 16 (Reuters) – Wall Street’s main indexes fell slightly on Thursday under pressure from Cisco and Walmart following disappointing forecasts, but lower U.S. Treasury yields helped lift some large-cap stocks. It softened the blow.
Communications and networking technology company Cisco Systems (CSCO.O) lowered its full-year sales and profit forecasts due to weak demand for networking equipment, and its stock price fell 11.6%. Elsewhere in technology, shares of Palo Alto Networks (PANW.O) fell after the company reported lower-than-expected second-quarter billings late Wednesday.
Walmart (WMT.N) fell 8.1% a day after hitting a new all-time high. The retail giant raised its full-year sales and profit forecasts but said U.S. consumers were spending cautiously due to inflation.
The S&P 500 Consumer staples index (.SPLRCS) fell 1.3%, with Walmart’s warning also weighing on other retailers, and Dollar General (DG.N) fell 3.5%, Dollar・Tree (DLTR.O) fell 5.2%.
Also, Target (TGT.N) fell 0.8%, but regained some gains from the previous session, when it soared 17.8% after giving a bullish outlook for the holiday quarter.
Wall Street indexes have been rising for the past four sessions, with data suggesting cooling in US inflation and raising expectations that the US Federal Reserve will complete its interest rate hike. The passage of emergency legislation this week to avert a government shutdown also eased some tensions.
After several days of gains, investors saw an opportunity to take a step back, said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Conn.
“The immediate weakness is profit taking and drawdowns based on Cisco Systems, Walmart and Palo Alto,” Pavlik said.
Given that Cisco and Walmart are “the backbones of their respective industries,” Paul Nolte, senior wealth advisor and market strategist at Murphy & Sylvest, said Cisco’s and Walmart’s weaknesses are due to “consumer It does raise some questions about the health and perhaps the health of the technology.” sector. “
The Dow Jones Industrial Average (.DJI) fell 148.1 points (0.42%) to 34,843.11, the S&P 500 (.SPX) fell 4.27 points (0.09%) to 4,498.61, and the Nasdaq Composite Index (.IXIC) fell 16.61 points. It fell. It was 0.12%, or 14,087.22.
Energy (.SPNY) led the decline among the S&P’s 11 major sectors, down 2.5%, after hitting a four-month low as oil prices fell more than 4%. The sector with the highest rate of increase was utilities (.SPLRCU), which rose 0.9%.
However, U.S. bonds capped their decline after Thursday’s Labor Department report showed weekly jobless claims were higher than expected, reinforcing the view that the Fed does not need to raise rates further. Yields have fallen.
Money markets have fully priced in the probability that the Fed will keep rates unchanged in December, but CME Group’s FedWatch tool puts the probability of a rate cut of at least 25 basis points in May at about 62%. There is.
Palo Alto Networks fell 5.8% after the cybersecurity firm’s billing warning.
Macy’s (Minnesota) shares rose 4.6% after the company’s quarterly sales beat analysts’ expectations.
Declining issues outnumbered advancing issues on the New York Stock Exchange by a 1.49-to-1 ratio. On the Nasdaq, a 1.90-to-1 ratio favored declining stocks.
The S&P 500 has recorded 15 new highs and 2 new lows in 52 weeks. The Nasdaq Composite recorded 33 new highs and 108 new lows.
Reporting by Sinéad Carew in New York, Shristi Achar A and Amruta Khandekar in Bengaluru. Editing: Maju Samuel, Pooja Desai, David Gregorio
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