Wall St hits two-week lows as rising bond yields, Walmart results drag

By Avinash P and Purvi Agarwal

Aug 20 (Reuters) – The main U.S. stock indexes hovered near two-week lows on Thursday as climbing Treasury yields dented risk appetite, while a rare quarterly sales miss from retail bellwether Walmart disappointed investors.

Walmart lost 9.2% after missing Wall Street expectations for quarterly comparable sales as shoppers pulled back on spending in the face of rising gas prices. It weighed on the S&P 500 consumer staples index, the biggest sectoral loser, which was down 1.5%.

Rival retailers were pulled lower after Walmart’s earnings, with Albertsons and Costco down 1.3% and 1.4%, respectively.

“Investor sentiment wavered after the company (Walmart) held to its conservative guidance last quarter, and the slightly raised outlook may not be sufficient to restore confidence,” said Sky Canaves, principal analyst at Emarketer.

Meanwhile, U.S. Treasury Secretary Scott Bessent said he may again increase the volume of Treasury bonds the government will repurchase.

Though yields on U.S. Treasuries dipped briefly, they were still trading higher on the day, with the 30-year yield up 3.5 basis points to 5.244%. The benchmark 10-year bond also rose and was last at 4.700%.

Shiraz Ahmed, founder and CEO of Sartorial Wealth, said the muted reaction in equities reflected growing investor concerns that markets were due for a pullback after their recent record rally.

Concerns over elevated oil prices stemming from the Iran conflict and increasing government debt pushed the U.S. 30-year Treasury yield to a near-two-decade high this week, before the initial support measures announced for long-duration bonds caused it to retreat sharply on Wednesday.

At 12:15 p.m. ET, the Dow Jones Industrial Average fell 458.35 points, or 0.86%, to 53,004.70, the S&P 500 lost 34.23 points, or 0.44%, to 7,673.75, and the Nasdaq Composite dropped 243.56 points, or 0.92%, to 26,087.53.

The S&P 500 consumer discretionary sector was the biggest weight on the benchmark index, dragged by losses in Amazon and Tesla.

Meanwhile, oil prices rose 2.1%, extending gains for the fifth consecutive session due to stalled U.S.-Iran peace talks and Middle East supply disruptions. The S&P 500 energy index rose 1.4% and was the biggest gainer on the S&P 500.

Separately, data showed the number of Americans filing claims for unemployment benefits slipped last week, suggesting the labor market remains stable.

Minutes of the U.S. Federal Reserve’s July meeting, released on Wednesday, showed inflation concerns deepening at the central bank, with “several” policymakers ready to raise interest rates.

Among others, cryptocurrency-related companies rallied a day after U.S. President Donald Trump called on Congress to pass a crypto bill. Bitcoin hoarder Strategy added 7% and exchange operator Coinbase Global rose 6.2%.

Biotech company Moderna dropped nearly 20% a day after surging nearly 177%.

Deere gained 9% following a full-year net income forecast raise from the world’s largest farm-equipment manufacturer.

Coty fell 7.4% after the CoverGirl owner forecast current-quarter earnings below expectations and withheld its annual outlook, while Advance Auto Parts shed 25.2% after issuing a weaker annual sales forecast.

Declining issues outnumbered advancers by a 1.65-to-1 ratio on the NYSE and by a 2-to-1 ratio on the Nasdaq.

The S&P 500 posted 16 new 52-week highs and two new lows, while the Nasdaq Composite recorded 53 new highs and 77 new lows.

(Reporting by Avinash P and Purvi Agarwal in Bengaluru, additional reporting by Koyena Das; Editing by Pooja Desai)