Wall Street had its worst day in more than four months Monday as the dollar weakened and concerns arose about the strength of the retail industry following a rare sales decline at Wal-Mart Stores Inc.
NEW YORK (AP) — Wall Street had its worst day in more than four months Monday as the dollar weakened and concerns arose about the strength of the retail industry following a rare sales decline at Wal-Mart Stores Inc. The Dow Jones industrials fell 158 points.
Investors were uneasy after the dollar fell for the fifth straight day and after Wal-Mart, the world’s largest retailer, reported a 0.1 percent drop in same-store sales, those from stores open at least a year. Same-store sales are the industry standard for assessing a retailer’s strength, and while overall retail sales appeared strong last weekend, Wal-Mart’s first deficit in a decade raised concerns about the strength of consumer spending during the holiday season.
“There is now significant concern that the holiday retail season is going to underperform,” said Gregory Miller, chief economist at SunTrust Banks. “Traffic doesn’t necessarily translate into profits,” he said, referring to reports of crowded stores over the weekend.
As the dollar’s slide continued, it hit a 20-month low against the euro though it did eventually move higher against the Japanese yen. The dollar’s weakness raised concerns that foreign investors were sensing weakness in the U.S. economy and would pull some of their investments from U.S. markets.
Beyond the weak dollar and news from Wal-Mart, some retrenchment was to be expected as investors seek to preserve their profits after stocks have soared the past two months.
According to preliminary calculations, the Dow fell 158.38, or 1.29 percent, to 12,121.79. It was the Dow’s biggest drop since a string of triple-digit declines in mid-July that followed disappointing profit reports and a spike in oil prices amid tensions with Iran and North Korea.
Broader stock indicators also dropped sharply Monday. The Standard & Poor’s 500 index fell 19.00, or 1.36 percent, to 1,381.95, and the Nasdaq composite index slid 54.34, or 2.21 percent, to 2,405.92.