U.S. stock indexes fell Tuesday as July retail sales declined, another sign the economy may be slowing a bit in the face of a Covid resurgence.
Still, Tuesday’s losses came after the Dow Jones Industrial Average and S&P 500 closed at record highs in the prior session.
The Dow fell around 390 points, or 1.1%. The S&P 500 shed 1% and the Nasdaq Composite lost 1.2%.
Retail sales declined 1.1% in July, a steeper drop than the 0.3% dip expected by economists surveyed by Dow Jones. The Census Bureau revised June’s reading to a 0.7% jump.
“When we’re looking at the expectations for consumer strength going forward, some of the edge is being taken off by the rise in the delta variant,” BMO Wealth Management’s Yung-Yu Ma said. “These challenges aren’t going to go away quickly.”
Home Depot fell more than 4% after reporting second-quarter results, weighing on the Dow. While quarterly earnings topped estimates, same-store sales rose 4.5% in the period, below the 5% consensus estimate of analysts polled by StreetAccount. U.S. same store sales increased by just 3.4%.
Walmart shares inched higher after second-quarter earnings topped estimates. The retailer gained ground in groceries and reported a strong start to the back-to-school season.
Elsewhere, health care shares saw strength with the S&P 500 Health Care Sector hitting a record high. United Health, Merck and Johnson & Johnson all traded in the green.
Meanwhile, technology names trended lower. Big Tech shares, including Google-parent Alphabet, Amazon, Apple and Facebook, traded in the red.
Disappointing economic data from China on Monday intensified concerns about a slowdown in global growth. Chip stocks tumbled for a second day on Tuesday with the iShares Semiconductor ETF down 2% and Nvidia more than 2% lower. Shares of Tesla and Boeing, both also heavily reliant on China as a growth market, declined.
The Dow and the S&P 500 closed at record highs Monday in their fifth straight positive session. The S&P 500′s move during Monday’s session marked a milestone as the benchmark index doubled from its pandemic closing low on March 23, 2020. This marks the fastest bull-market doubling since World War II, according to calculations from CNBC.