By Medha Singh and Ambar Warrick
(Reuters) – The S&P 500 and Dow Jones indexes eased on Tuesday, handing back some gains from a strong rally in the previous session, as investors digested a mixed set of quarterly results from retailers including Home Depot and Walmart.
Home improvement chain Home Depot fell 1.9% as it missed quarterly profit estimates due to higher costs, while department store operator Kohl’s Corp slumped 6.1% after reporting a bigger-than-expected loss.
Walmart Inc, on the other hand, gained 1.7% after posting a jump in first-quarter U.S. comparable sales as online sales soared due to stockpiling of essentials during the coronavirus-related lockdown.
“Home Depot’s earnings report shows we shouldn’t assume businesses deemed essential with a strong online presence are entirely immune from the effects of the virus,” said Mike Loewengart, managing director of investment strategy at E*TRADE Financial Corp.
Trillions of dollars in stimulus has helped the S&P 500 rebound more than 34% from its March lows. Although it is now just about 13% below its record high, the pace of the rally has slowed in May owing to uncertainty over the outbreak and rising U.S.-China tensions.
The benchmark index jumped more than 3% on Monday, boosted by promising early stage data for a potential COVID-19 vaccine and Federal Reserve Chair Jerome Powell’s pledge to support the economy as needed until the current crisis has passed.
Attention now turns to testimony by Powell and U.S. Treasury Secretary Steven Mnuchin before the Senate Banking Committee about the government’s handling of its massive economic response to the health crisis.
“By far the biggest focus for markets are variables attached to medical news, (followed by) actions from central banks and fiscal policymakers,” said Tim Shaler, chief economist for iTrustCapital in Newport Beach, California.
At 9:57 a.m. ET, the Dow Jones Industrial Average was down 136.92 points, or 0.56%, at 24,460.45, the S&P 500 was down 5.92 points, or 0.20%, at 2,947.99, and the Nasdaq Composite was up 33.17 points, or 0.36%, at 9,268.00.
Nine of the 11 major S&P sectors were trading lower, led by financial and energy stocks. Technology and consumer discretionary edged slightly higher.
Advance Auto Parts jumped 7.3% after the company said same-store sales improved significantly at the start of second quarter.
Declining issues outnumbered more than 2-to-1 on the NYSE and nearly matched them on the Nasdaq.
The S&P index recorded four new 52-week highs and no new low, while the Nasdaq recorded 27 new highs and three new lows.
(Reporting by Medha Singh and Ambar Warrick in Bengaluru; Additional reporting by Pawel Goraj in Gdansk; Editing by Patrick Graham and Arun Koyyur)