NEW YORK (CNN/Money) -
Weakness in tech and retail stocks dragged the broader market near four-week lows Tuesday after financial results from Wal-Mart Stores and Gateway, along with the latest economic reports, raised concerns that high energy prices may be taking a toll on Wall Street.
As of 5:45 p.m. EST, Nasdaq and S&P 500 futures pointed to a mostly higher open for the stock market Wednesday, when fair value is taken into account.
The Dow Jones industrial average (down 120.93 to 10,513.45, Charts) and the broader Standard & Poor's 500 (down 14.53 to 1,219.34, Charts) lost nearly 1.2 percent while the tech-heavy Nasdaq composite (down 29.98 to 2,137.06, Charts) fell 1.4 percent.
Click here to check after-hours quotes
After the closing bell, Dow component Hewlett-Packard (Research) reported third-quarter earnings that topped expectations. Shares rose more than 6 percent on the Inet electronic brokerage from its close at $23.70 on the New York Stock Exchange.
Shares of Abercrombie & Fitch (Research) fell more than 9 percent in extended hours of trading from its close of $61.23 after retailer's results fell short of analyst estimates.
The negative sentiment also dragged down shares of Urban Outfitters (Research), Pacific Sunwear (Research) and Bebe Stores (Research).
However, shares of Nordstrom (Research) rose 4 percent in after-hours trading after the department store posted higher quarterly profit and raised its outlook for the full year.
Shares of Wal-Mart (down $1.53 to $47.57, Research) sank 3 percent and the chain was the leading blue-chip loser in regular trade after it posted disappointing second-quarter sales and reported that high oil prices may continue to weigh on results. (Full story.)
J.C. Penney Co. (down $2.16 to $49.74, Research) posted a higher-than-expected second-quarter profit, but shares fell more than 4 percent in late trade.
Staples (down $0.57 to $21.75, Research) said quarterly profit rose 20 percent on strong demand at North American stores, but the office supply retailer's stock slumped nearly 3 percent.
Shares of Home Depot (down $0.94 to $40.67, Research) also fell, even though the home improvement retailer reported upbeat second-quarter earnings and revised its full-year growth forecast upward.
Dick's Sporting Goods (down $6.33 to $32.90, Research) said second-quarter profit rose 24 percent, but the sporting goods retailer cut its outlook for the year, sending its shares down 15 percent.
Sears (down $7.73 to $137.16, Research) and Costco (down $0.26 to $42.73, Research) fell in sympathy with Wal-Mart, and American Eagle Outfitters (down $2.84 to $27.88, Research) lost nearly 10 percent after the specialty retailer said second-quarter profit nearly doubled but issued a cautious third-quarter outlook.
"It seems so tied to the price of oil, that it's very hard to forecast what stocks will do next. On balance the message of the markets for the last nine trading sessions, including today, seems to have shifted to say that the price of oil is taking a chunk out of consumer spending," said Hugh Johnson, chairman of asset management company Johnson Illington Advisors.
Economy on the oil skids?
A downbeat quarter from Wal-Mart wasn't the only evidence that high oil prices are becoming a drag on the economy.
Industrial output rose a smaller-than-expected 0.1 percent in July, according to the Federal Reserve, sparking fears that the economy may be slowing. Businesses also ran at a slower-than-expected operating rate of 79.7 percent last month. (Full story.)
The Labor Department said the Consumer Price Index (CPI) surged 0.5 percent in July, beating forecasts from economists surveyed by Briefing.com for a 0.4 percent rise. (Full story.)
But the so-called "core" CPI, which excludes volatile food and energy prices, inched higher by 0.1 percent, slightly below Wall Street's estimate of 0.2 percent.
And the Commerce Department said housing starts edged 0.1 percent lower in July but exceeded analysts' forecasts. (Full story.)
Investors are also looking ahead to Wednesday, when the July producer price report will be released.
More market movers
In tech, Gateway (down $0.78 to $3.11, Research) shares plunged 20 percent after the computer maker said earnings rose but revised its full-year forecast downward. (Full story.)
The personal computer maker weighed on techs, with Sun Microsystems (down $0.09 to $3.67, Research), Tellabs (down $0.27 to $9.09, Research), Qwest Communications (down $0.09 to $3.85, Research) and Qualcomm (down $1.21 to $40.25, Research) all falling more than 2 percent on the negative sentiment.
And Deere & Co. (down $8.18 to $64.63, Research) said widespread drought in the United States caused an unexpected decline in quarterly earnings and forced the farm and garden equipment maker to cut its full-year forecast. Shares tumbled 11 percent, while shares of fellow farm equipment maker Caterpillar (down $1.57 to $53.69, Research) fell nearly 3 percent in sympathy.
On the upside, Delta (up $0.19 to $1.58, Research) said it is selling its Atlantic Southeast Airlines for $425 million in cash to SkyWest Inc. (up $2.97 to $25.01, Research) to try to fend off bankruptcy. Shares of Delta rose nearly 10 percent late in the afternoon, while SkyWest stock jumped 13 percent.
Shares of Spire (up $2.76 to $10.81, Research) rose more than 34 percent after the provider of solar energy manufacturing equipment said second-quarter earnings and sales surged.
And Estee Lauder (up $3.40 to $40.80, Research) said that after a one-time tax charge, the cosmetics company beat Wall Street estimates by a penny a share. Shares soared more than 9 percent.
Market breadth was negative, with losers beating winners more than two to one on the New York Stock Exchange as 1.4 billion shares changed hands. Decliners topped advancers more than two to one on the Nasdaq as 1.5 billion shares were traded.
The September light crude futures contract settled down 19 cents at $66.08 a barrel on the New York Mercantile Exchange. Oil prices remained below the record high in afternoon trading.
Major markets in Asia rose, with Tokyo's Nikkei index hitting a four-year high, while major European markets ended the day lower.
Treasury prices spiked on the soft industrial production data, sending the yield on the 10-year note to 4.22 percent from 4.28 late Monday. The dollar climbed against the yen but was relatively unchanged against the euro.
COMEX gold gained $3.90 to $451.50, as precious metals neared historic highs.
How can you cash in on the oil boom? Click here for more
Worried about high oil prices? Click here for the special report "Oil Crunch 2005."