S&P 500 Drops After Retail Sales Slide

On Tuesday, the S&P 500 declined after a fall in customer discretionary stocks. It happened after the weaker results from Home Depot with worries about the customer in the middle of data showing retail sales slid too low.

The S&P 500 dropped by almost 0.8%, while the Dow Jones Industrial Average fell by 0.3% or 303 points. The Nasdaq also decreased by 0.96%.

In July, retail sales fell by almost 1.2%, which seemed even more than the 0.4% decline expected, measured by a fall in spending on building materials, autos, and nonstore retailers.

Jefferies said in a note that there are two signs. It added that there had been a regular model of upward changes to retail sales since April so that the momentum can improve with the next release.

Overview

Cyclicals, including materials, industrials, and consumer discretionary, were red, with the end down more than 3% in the middle of pressure from retailers such as Amazon and Home Depot.

Home Depot dropped more than 5% after reporting a weaker second quarter than they expected.

While big ticket demand remains to outpace supply in various categories, reducing demand in smaller-ticket types seems to be a leading indicator to decreasing comp growth in the future.

After reporting better second-quarter results than they expected, Walmart increased its full-year guidance. The company’s shares seemed down about 0.4%.

In the meantime, Technology stocks struggled to replicate a positive start to the week, falling by nearly 2%, as mega-cap tech seemed to trade in the red.

Apple,  Facebook, Microsoft, and Google-parent Alphabet seemed below the flatline.

Health care stocks also passed the broader market uneasiness.

On Tuesday, the U.K. approved using Moderna’s Covid-19 vaccine for children from 12 to 17 years.

Other vaccine stocks, including Novavax and Pfizer, also seemed higher on the day.