Wall Street falls as Wal-Mart eclipses Obama
NEW YORK (Reuters) - Stocks fell for a second straight day on Thursday as Wal-Mart's disappointing December sales and lowered earnings outlook fueled concern the recession may be worsening, pinching consumers' wallets further.
President-elect Barack Obama again made a push for a massive economic stimulus plan, though there was some unease among investors as details of his plan remain unclear.
Shares of Wal-Mart Stores Inc , the world's biggest retailer, slid 8 percent, making it the biggest drag on the Dow.
Wal-Mart offered the starkest indication yet that consumer spending, which accounts for about two-thirds of U.S. economic activity, continues to falter as households fret about mounting unemployment and dwindling savings.
"I think we're torn between optimism (about) the new administration and stimulus plans and the awful economic outlook," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago. "Expectations are almost for the worst at this point. Maybe we come out not as bad."
The Dow Jones industrial average fell 100.83 points, or 1.15 percent, to 8,668.87. The Standard & Poor's 500 Index dropped 7.57 points, or 0.83 percent, to 899.08. The Nasdaq Composite Index lost 7.90 points, or 0.49 percent, to 1,591.16.
Obama, speaking on the economy ahead of his swearing-in on January 20, said his plan includes a $1,000 tax cut for middle-class families and extended jobless aid and health-care coverage for the unemployed.
His call for a swift passing of a new stimulus plan that could total nearly $800 billion comes a day before data that is expected to show more than half a million U.S. nonfarm jobs were lost in December and unemployment rose to 7 percent.
Limited Brands reported a bigger-than-expected 10 percent decline in sales and its shares fell 8.5 percent to $9.79 on the NYSE.
The S&P retail index shed 0.3 percent.
Sears holdings Corp , however, jumped 20 percent to $48.75 on the Nasdaq after it forecast quarterly profit above Wall Street estimates.
Investors also snapped up some of Wednesday's worst losers, including aluminum producer Alcoa , up 1.7 percent to $11.07 on the New York Stock Exchange. Shares of Microsoft rose 2.1 percent to $19.91 on the Nasdaq.
But the gloomy retail news and displeasure at the lack of further detail on Obama's plan threatened to push the market to a second straight day of losses.
"I suppose some people are looking for more from him," said Lesh. "Maybe some people are disappointed in his honesty but those are unrealistic expectations to begin with."
Shares of technology services company IBM were the second-worst drag on the Dow behind Wal-Mart, as fallout from Intel Corp's reduced revenue outlook continued to fan worried about business spending.
IBM dropped 1.5 percent to $86.45 on the NYSE. On Nasdaq, the top drag was chip-maker Qualcomm , down 2.7 percent to $34.60.
Both the Dow industrial average and the S&P 500 have now erased their gains for the year so far. Notwithstanding, the S&P 500 is still up near 19 percent since its November 21 low.
(Additional reporting by Chuck Mikolajczak; Editing by James Dalgleish)