U.S. stocks fell on Tuesday after retail giant Walmart posted better-than-expected earnings, but disappointing U.S. housing data added to economic gloom.
Wall Street’s broad S&P 500 and the tech-heavy Nasdaq Composite lost 0.2 and 0.3 percent, respectively, after the New York opening bell.
The European regional Stoxx 600 equity index added 0.1%. Germany’s Dax rose 0.2%, while London’s FTSE 100 rose 0.6%.
The moves came after the world’s largest brick-and-mortar retailer, Walmart, reported stronger-than-expected quarterly numbers and raised its full-year forecast. The company – widely seen as a barometer of the health of the American consumer – issued its second earnings warning in 10 weeks in late July.
Walmart shares rose 5%, after forecasting a lower annual profit decline than previously reported. Stocks in May suffered their biggest one-day decline since 1987, when Walmart first cut its forecast.
But data on US housing starts released on Tuesday showed monthly new residential construction fell in July to an annualized rate of 1.45 million, below the consensus forecast of 1.54 million and below the figure June of 1.56 million.
“Homebuilders now have far too much inventory and prices are under pressure,” wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics. “They are also facing increasing competition from private sellers of existing homes, who are now starting to flood the market after a year of inactivity, seeing prices rise rapidly.”
Earlier on Tuesday, new survey results had clouded Germany’s outlook. Figures from economic research group Zew showed confidence among investment professionals in the euro zone’s biggest economy deteriorated again in August. A reading of minus 55.3 for August was worse than the previous month’s figure and a consensus forecast of minus 53.8.
Central banks have indicated in recent months that monetary policy tightening strategies will be guided in part by signals given by economic data releases.
This has caused market watchers to pay more attention to individual data points than before, said Altaf Kassam, head of investment strategy and research for the Emea region at State Street Global Advisors.
“It will increase volatility and the worry is that it will be amplified by weaker liquidity this summer,” he said. “Every data point is going to be scrutinized, which can lead to greater day-to-day volatility.”
In Asian stock markets, Hong Kong’s Hang Seng index closed down 1.1%, dragged down by a decline in shares of food delivery group Meituan after Reuters reported that technology group Tencent planned to sell all or part of its 17% stake in the business.
The drop came despite a sharp rise in shares of Chinese real estate companies. They made gains on reports that Beijing may order public groups to underwrite some developer bonds issued in the country’s onshore market, after data released Monday indicated a slowdown in the world’s second-largest economy.
In commodities, Brent fell 0.1% to $95.07 a barrel. A day earlier, the international oil benchmark had slipped more than 5% to $92.78 in the latest sign of recession fears stalking markets. U.S. marker West Texas Intermediate fell 0.5% on Tuesday to $88.96 a barrel, after hitting its lowest level since early February on Monday – before Russia’s full-scale invasion of Ukraine.
US government bonds came under pressure on Tuesday, with the yield on the benchmark 10-year Treasury rising 0.07 percentage points to 2.86% as its price fell. The yield on the equivalent German Bund rose 0.1 percentage point to 0.99%.