Wal-Mart Stores Inc. shares weakened Thursday after the retail giant, citing the impact of a strong dollar and planned store closures, trimmed its sales outlook for the year.
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The losses were small but spread across many industries. Three research analysts have rated the stock with a sell rating, twenty-two have given a hold rating, six have assigned a buy rating and one has issued a strong buy rating to the company’s stock.
The Dow Jones industrial average was down 35.44 points, or 0.22 percent, at 16,418.39. The Standard & Poor’s 500 index was down 3 points, or 0.2 per cent, to 1,923. The Nasdaq Composite had added 10.21 points, or 0.23 percent, to 4,497.75.
Earnings fell from $4.97 billion in the fourth quarter last year to $4.57 billion in the fourth quarter of fiscal year 2016.
As a result, Walmart said its sales would be essentially unchanged for the fiscal year ending in January 2017.
Wal-Mart announced last month that it would close 269 stores globally.
All of that hurt the stock price, which had fallen by more than 4 percent as of 1 p.m. ET, down to around $63.40.
The results sent Wal-Mart shares down almost 5 percent.
Looking forwardFor the first quarter, Wal-Mart expects to earn between $0.80 and $0.95 per share. Competitors including Target, JC Penney and Macy’s will follow next week.
While Walmart hasn’t said exactly what led to the decision to part ways with MediaVest, a spokeswoman earlier this week said, “We are taking a different direction and looking for new ways to use media”. It’s the latest sign that the economy is still growing and that consumers are still spending even though the market has been turbulent. The Seattle-based retailer spent $4.6 billion on capital expenditure a year ago, and continues to expand its Prime program, which is estimated by some analysts to have 50 million members worldwide. Amazon is not only the undisputed leader in e-commerce, but the company also keeps widening the gap versus Wal-Mart. After rallying in recent days, oil prices came off session highs on Thursday after data showed a build in USA crude inventories.
“Seeing a little bit of a pause from the extremes that we’ve been put through over the past several weeks”, said Eric Wiegand, senior portfolio manager at the Private Client Reserve at U.S. Bank in NY.
CRUDE CLIMBS: Oil prices continued to rise as major oil-producing nations continued to talk about a deal that could limit production.
The weakness that emerged on Wall Street was partly due to a pullback by the price of crude oil, which almost offset the strength seen earlier in the day.
Walmart knows that it’s getting its butt kicked by AMZN online, so it’s been investing heavily in building out its digital presence.
Independent analyst Jim Ritterbusch said people are driving a bit more because the price of gas has plunged, but it’s not a big change, so it’s not helping improve prices.
“It looks like gasoline demand is still soft”, he said. That’s probably the most damning figure out of the whole report; after all, investors like to hear about, “What can you do for me in the future?” rather than, “What have you done for me lately?”
Excluding volatile food & energy prices, the so-called core consumer prices jumped by 0.3% – the biggest gain since August 2011.
ASIA’S DAY: Asian stock markets started with a broad rally but gains narrowed. The stock fell $1.22, or 4.6%, to $25.49. Following the announcement, the stock plunged as much as 4.5% during the pre-market hours. On the Nasdaq, 1,324 issues rose and 1,180 fell. Hong Kong’s Hang Seng surged 2.3 percent. Copper inched down to $2.074 a pound.
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U.S. Treasury prices ended slightly lower, with the yield on the benchmark 10-year note finishing one basis point higher at 1.75%.
