Dow drops by nearly 700 points as retail earnings disappoint | CNN Business

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US stocks plunged after fourth-quarter earnings and forecasts from mega-retailers like Walmart and Home Depot raised concerns about the strength of the US consumer

The Dow and S&P 500 each closed with their worst day since December 15 – the Dow fell about 696 points, or 2.1%, while the S&P dropped by 2%. The Nasdaq Composite closed 2.5% lower. Consumer spending accounts for about 70% of America’s gross domestic product, the broadest measure of the US economy, so a slowdown could weigh on growth and even send the United States into a recession. Recent economic data has been strong.

But the fourth quarter numbers painted a different picture, as the company missed revenue expectations for the first time since 2019, before the pandemic. The company also lowered its outlook for the year ahead as executives struck a more cautious tone about recession and inflation forecasts on the call that followed earnings. Shares of Home Depot stock fell by 7.1% on Tuesday.

 

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