The Dow goes down swinging and loses 110 points off its average as the massive retailer makes a profit warning.
First quarter earnings missed analyst expectations by a penny per share, and the Bentonville-based retailer said its second quarter earnings would not meet Wall Street expectations.
Wal-Mart’s net income grew to $2.46 billion USD for the quarter, up from $2.17 billion for the same period a year earlier. “The results were not up to Wal-Mart standards,” Chief Executive Lee Scott said in a pre-recorded statement. “We are making the necessary adjustments and I anticipate better results in the second half of the year.”
The Specter of Alan Greenspan
While Wal-Mart was disappointing market analysts and investors, a new report on consumer spending may have added to the unusual gloom on the Street today.
The Commerce Department released a report on retail sales today. Those sales showed a lot of strength in the marketplace. But that enthusiasm could get curbed very quickly.
A string of several consecutive interest rate hikes by the Federal Reserve could continue at the Fed’s next meeting. Mr. Greenspan has been trying to find an economic balance that will allow for growth without rampant inflation. And as spending continues, the Fed has shown it will increase the key interest rate repeatedly.
Critics claim these increases will push the country into a recession, if money becomes too expensive to borrow. The next Fed meeting will be June 29th and 30th.
David Utter is a staff writer for Murdok covering technology and business. Email him here.
