Wal-Mart earnings data weighs on Wall Street

Dow Jones: 12,212.79 (–178.46) SP 500: 1,315.44 (–27.57) Nasdaq: 2,756.42 (–77.53):US STOCKS tumbled yesterday, giving the Standard and Poor's 500 Index its biggest decline since August, as violence escalated in Libya and Wal-Mart stores reported sales that trailed its own forecasts.

Wal-Mart dropped 3.9 per cent to $53.22. The world’s biggest retailer posted a seventh straight quarterly sales drop at its US stores, falling short of its own projections for the holiday period. Sales at US stores open at least a year slid 1.8 per cent in the quarter ended January 28th, Wal-Mart said.

“The market is extremely vulnerable to the kind of global risk we’re seeing now,” said Tom Mangan, who helps oversee $2.5 billion as a money manager at James Investment Research in Xenia, Ohio.

“If the violence in Libya turns into a prolonged civil war, it will increase the risk that oil supplies could be disrupted. This could be the catalyst that starts the 5 per cent to 10 per cent correction,” he said.

Crude oil prices in New York jumped as much as 9.6 per cent from the February 18th settlement to $94.49 a barrel as soldiers deserted Libyan leader Muammar Gadafy’s government.

Libya, the holder of Africa’s largest oil reserves, is the latest country in the region to be convulsed by protests ignited by the ouster of Tunisia’s president last month and energised by the departure of Egypt’s president Hosni Mubarak on February 11th.

Exxon Mobil rallied 1.1 per cent to $85.41.

Chevron rose 1.8 per cent to $100.48.

Financial stocks had the biggest decline of 10 groups in the SP 500, slumping 3 per cent collectively.

Bank of America fell 4.1 per cent to $14.15. The biggest US lender by assets raised the goodwill impairment to reflect increased defaults and an almost two-year-old change in rules.

United Continental sank 8.7 per cent to $24.58, while AMR slumped 4.8 per cent to $7.08.

Netflix declined 4.7 per cent to $224.47. The DVD-rental and streaming company slipped after Amazon.com, the largest online retailer, said it would start offering instant streaming of more than 5,000 movies and TV shows to customers of its Amazon Prime home-delivery service. – (Bloomberg)