US: Dow weighed down by Walmart, Cisco Systems

A RALLY in Wall Street stocks showed signs of fatigue Thursday (Nov 16) as shares of Cisco Systems and Walmart plunged following corporate forecasts, weighing on the Dow.

Analysts described the market as primed for a pullback after a heady period that has generated talk that shares are “overbought”.

The Dow Jones Industrial Average finished down 0.1 per cent at 34,945.47.

The broad-based S&P 500 added 0.1 per cent at 4,508.24, while the tech-rich Nasdaq Composite Index also climbed 0.1 per cent to 14,113.67.

Major indices rallied the last two days following economic data showing moderating inflation that has suggested the US economy is slowing but may avert recession.

But shares of Walmart tumbled 8.1 per cent despite solid earnings from the retailing giant on the back of a 4.9 per cent jump in comparable sales at US stores.

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Analysts expressed disappointment with Walmart’s outlook, which included only a narrow increase in full-year profits. Company officials said a tightening of credit and an erosion of the pandemic-era consumer balance sheets were reasons for a “cautious” outlook on the fourth quarter.

Fellow Dow member Cisco Systems plunged nearly 10 per cent as it projected weaker than expected sales in the upcoming quarter, pointing to a “slowdown” of new product orders after “exceptionally strong product delivery over the past three quarters”.

Shares in Chinese e-commerce giant Alibaba plummeted 9.1 per cent after the company said it would cancel the spinoff of its cloud computing arm because of US curbs on exports of advanced chips. AFP