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Nasdaq Off 1%, Leads Stock Market Drop; Walmart Rattles Retail Sector

Earnings angst took the stock market lower Tuesday morning, with indexes trading near session lows at 10 a.m. ET. Walmart's lower outlook hurt the retail sector.

The Nasdaq composite was down 1%, while the S&P 500 lost 0.6%. Volume fell on the Nasdaq and rose on the NYSE compared with the same time on Monday.

The Dow Jones Industrial Average fell 0.3% after Walmart cut its current-quarter and full-year profit outlook late Monday. The Dow component cited soaring food prices, which is cutting into consumer demand for apparel and other types of general merchandise.

Walmart shares slid 8% in heavy volume and took down other retail stocks. Target fell 3.5%, Home Depot 2%, Amazon.com 3.4% and Best Buy 4%.

Discount, Electronics, Apparel Retail Fall

IBD's discount store, department store, consumer electronics, apparel store and internet retail industry groups fell 3% to 4.2%. Those groups were in the bottom 10 of 197 industry groups today.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 31857.30 -132.74 -0.41
S&P 500 (0S&P5) 3940.52 -26.32 -0.66
Nasdaq (0NDQC ) 11658.57 -124.10 -1.05
Russell 2000 179.18 -1.26 -0.70
IBD 50 26.93 -0.07 -0.26
Last Update: 10:10 AM ET 7/26/2022

Walmart's outlook came on the eve of several key earnings reports this morning. Alphabet and Microsoft report after the close today in a huge week of earnings for the stock market.

United Parcel Service beat second-quarter earnings expectations before the market open. The shipping company also raised its stock buybacks in 2022 to $3 billion. UPS stock fell 3% but bounced off its 50-day moving average.

Raytheon Technologies fell 2.5% on a mixed second-quarter report. The maker of missiles and other military hardware beat profit expectations. But a drop in missile and defense sales caused it to miss sales estimates. The company, though, backed its full year outlook. Raytheon is forming a consolidation that can be interpreted as a double bottom with a 100.78 buy point.

Cadence, GE, Graphic Packaging Among Stock Market Movers

Cadence Design Systems late Monday beat Q2 expectations and raised guidance for the current quarter and full year. The maker of electronic systems design software climbed 2.8% in active trading as it forms a cuplike chart pattern with a 192.80 buy point.

General Electric climbed above its 50-day moving average for the first time since February after the industrial conglomerate reported a surprising rise in second-quarter profit and its cash burn situation improved.

Innovator IBD 50 ETF was down 0.2%, with Cadence Design its best performing stock.

Graphic Packaging gapped up on a 107% jump in adjusted earnings for the second quarter and a 36% increase in sales. The maker of paperboard packaging products is forming a cup base with a 23.09 buy point.

Costco got dragged down in the retail sell-off, losing 2.5% in heavy volume. The stock fell back to its 200-day moving average.

In economic news, the S&P CoreLogic Case-Shiller home price index slowed to a 1.3% increase in May. It had climbed a revised 1.7% the previous month, and it missed economist forecasts for a 1.6% increase. In another housing report, new home sales fell to 590,000 in June from 642,000 in May. Forecasts were for 664,000, according to Econoday.

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