US close: Stocks fall on debt ceiling worries, consumer sentiment
Wall Street ended in the red on Tuesday, as stocks fell across the board in response to ongoing uncertainties surrounding the federal debt ceiling.
The Dow Jones Industrial Average closed down 1.01% at 33,012.14, while the S&P 500 fell 0.64% to 4,109.90, and the tech-heavy Nasdaq Composite slipped 0.18% to end the day at 12,343.05.
Investors were closely monitoring the discussions between the White House and Congress as the deadline loomed.
Sentiment was also impacted by disappointing earnings results from the likes of Home Depot.
On the currency front, the dollar was last up 0.05% on sterling to trade at 80.12p, while it weakened slightly by 0.01% against the euro to 90.05 euro cents.
The greenback also managed gains on the yen, advancing 0.02% to change hands at JPY 136.42.
“Comments from House Speaker Kevin McCarthy that there had been no progress on debt ceiling talks in contrast to more recent optimistic comments from Lael Brainard has seen markets drift lower,” said CMC Markets chief market analyst Michael Hewson.
“Sentiment hasn’t been helped by some disappointing first quarter numbers from DIY retailer Home Depot.
“The weak outlook has also put downward pressure on the wider sector with Lowes and Target share prices also under pressure, and Target due to report tomorrow.”
Consumer spending rise comes in below forecasts
On the economic front, consumer spending in the US saw a moderate upturn last month, albeit at a slower rate than initially projected.
According to data from the Department of Commerce, the country saw month-on-month retail sales growth of 0.4%, reaching a total of $686.1bn, falling short of the anticipated 0.7% surge.
“'Control' retail sales, which feed into the GDP calculation, rose 0.7% in April, more than recouping March's decline,” noted Oren Klachkin, lead US economist at Oxford Economics.
“Fortunately for Fed officials, they have another month's worth of economic data - including another CPI inflation and jobs report - released before the June FOMC meeting to decide whether to raise interest rates again.
“While inflation remains far above the 2% objective, we think Fed officials will stand pat next month and let tighter bank lending standards do some of their work for them.”
Meanwhile, America’s industrial sector saw a recovery in production after two consecutive months of stagnation, fuelled by a revival in factory activities.
The Department of Commerce reported a 0.5% month-on-month increase in seasonally adjusted total production, slightly surpassing the consensus estimate of 0.4%.
Home Depot takes a hit, Capital One up on Berkshire investment
In equities, Home Depot shares took a hit, closing 2.15% lower, after the company announced sales that fell significantly short of estimates for the last quarter.
The home improvement retail giant also cut its full-year sales guidance amid slower demand.
Horizon Therapeutics' also faced a tough day, plummeting 14.17% on the back of reports that the Federal Trade Commission was considering trying to block its $27.8bn acquisition by biotech firm Amgen.
Amgen shares were also negatively affected, ending the day down 2.42%.
On the upside, Capital One Financial Group's stocks rose 2.05%, buoyed by the news of Warren Buffett's Berkshire Hathaway investing nearly $1bn through the first quarter.
The investment led to Berkshire amassing a 2.6% holding in the credit card and banking provider.
Reporting by Josh White for Sharecast.com.
DOW JONES INDUSTRIAL AVERAGE -336.46 (-1.01%) 33,012.14
RISERS
Microsoft Corporation +0.74% $311.74
Salesforce +0.61% $204.56
International Business Machines +0.08% $123.46
Apple Inc 0% $172.07
Johnson & Johnson -0.13% $159.34
Procter & Gamble -0.17% $155.74
Merck & Co -0.25% $116.08
Cisco Systems -0.38% $46.92
Goldman Sachs Group -0.39% $320.81
Walgreens Boots Alliance -0.48% $31.35
FALLERS
Nike Inc -2.8% $116.48
3M Co -2.47% $98.01
Amgen Inc -2.42% $227.88
Chevron Corporation -2.35% $153.51
Dow Inc -2.3% $51.06
Home Depot -2.15% $282.33
Walt Disney Co -2.03% $90.98
Verizon Communications -1.96% $36.05
Intel Corporation -1.95% $29.22
Caterpillar Inc -1.94% $207.20
S&P 500 -26.38 (-0.64%) 4,109.90
RISERS
Advanced Micro Devices +4.19% $101.48
GE Healthcare Technologies +3.8% $77.78
Alphabet Class C +2.68% $120.09
Alphabet Class A +2.58% $119.51
Capital One Financial Corporation +2.05% $90.95
Amazon.com Inc +1.98% $113.40
Gartner Inc +1.94% $321.21
DR Horton +1.82% $111.80
DaVita Inc +1.71% $98.52
Verisk Analytics +1.45% $218.11
FALLERS
Caesars Entertainment -6.89% $41.38
Gen Digital -5.79% $15.46
Newell Brands -5.71% $8.75
Paramount Global -5.44% $14.95
Etsy Inc -5.31% $92.65
AES Corporation -5.18% $20.85
Warner Bros Discovery -5.15% $12.15
VF Corporation -4.89% $20.60
Digital Realty Trust -4.86% $93.60
eBay Inc -4.65% $43.03
NASDAQ COMPOSITE -22.16 (-0.18%) 12,343.05
RISERS
Advanced Micro Devices +4.19% $101.48
Baidu Inc +3.97% $132.68
Alphabet Class C +2.68% $120.09
Alphabet Class A +2.58% $119.51
Amazon.com Inc +1.98% $113.40
Verisk Analytics +1.45% $218.11
Lam Research Corporation +1.21% $558.935
KLA Corporation +1.17% $408.81
Nvidia Corporation +0.9% $292.13
Microsoft Corporation +0.74% $311.74
FALLERS
Seagen Inc -5.97% $187.64
eBay Inc -4.65% $43.03
Enphase Energy -4.59% $160.96
Atlassian Corporation -4.22% $139.22
Moderna Inc -3.95% $125.11
Exelon Corporation -3.41% $39.37
Skyworks Solutions -3.08% $96.43
Match Group -2.6% $31.48
Kraft Heinz -2.91% $39.00
Paccar -2.8% $70.52