Stocks opened lower Thursday and stayed in negative territory through the close. Weighing on sentiment today were bouncing Treasury yields. A disappointing round of retail earnings didn’t help, either.
The main equity indexes snapped a three-day losing streak on Wednesday as bond yields fell following the Treasury Department’s announcement that it will increase buybacks of longer-dated debt.
But yields on the 10-year Treasury (+5.1 basis points to 4.704%) and the 30-year Treasury (+5.4 basis points to 5.248%) resumed their climb today after a report released late Wednesday showed U.S. debt has crossed the $40 trillion mark.
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Rising yields pressured the stock market, with the tech-heavy Nasdaq Composite closing down 1.0% at 26,067, the broader S&P 500 falling 0.9% to 7,641, and the blue-chip Dow Jones Industrial Average dropping 1.3% to 52,759.
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Walmart has its worst day in four years on same-store sales miss
Walmart (WMT) was the worst Dow Jones stock today, sinking 9.2% — its worst day since May 16, 2022.
Ahead of the open, WMT reported better-than-expected fiscal 2027 second-quarter earnings of 81 cents per share on revenue of $187.9 billion, but same-store sales growth of 2.6% fell short of what Wall Street anticipated.
The company also gave soft fiscal third-quarter guidance, even as it raised its full-year outlook.
“Walmart is not losing market share — contrary to what I heard after Target’s earnings — in fact, the company continues to gain share across income tiers, driven by higher-income consumers seeking value,” says David Wagner, head of equity and portfolio manager at Aptus Capital Advisors.
Wagner adds that the same-store sales miss was a result of “non-competitive factors” such as lower prescription drug prices, an ongoing shift toward e-commerce and delivery services, and “persistent cost pressures that prompted thousands of selective price cuts to aid budget-conscious shoppers.”
The portfolio manager believes the blue chip stock‘s post-earnings pullback should be viewed as a buying opportunity.
Advance Auto Parts plummets after earnings
Fellow retailer Advance Auto Parts (AAP) also sold off sharply, falling 24.6% — its worst day since May 31, 2023 — after its turn on the earnings calendar. While the auto parts chain reported higher-than-expected earnings of $1.03 per share, revenue of $2 billion came up short of what analysts were calling for.
AAP also said same-store sales were down 0.5% from the year-ago period. “Total enterprise sales performance was impacted by the DIY channel as tighter household budgets constrained spending more than we anticipated, especially during the last four weeks of the quarter,” explained Advanced Auto Parts CEO Shane O’Kelly in the earnings release.
Deere jumps to the top of the S&P 500 after earnings
Not all of the day’s earnings reactions were negative. Deere (DE) jumped 6.9%, making it one of the best S&P 500 stocks today, after the farm equipment manufacturer reported fiscal third-quarter earnings of $5.10 per share on revenue of $11 billion.
Wall Street anticipated earnings of $4.70 per share on revenue of $10.73 billion.
DE also raised the low end of its full-year net income forecast to $4.75 billion from $4.5 billion.
