Retail shares kicked off the week on a sour note, falling 1.8 percent in the first hour of trading as Goldman, Sachs & Co. cut Wal-Mart Stores Inc. to “neutral” from “buy” and said there were few “positive catalysts” to drive the stock up higher.
The S&P Retail Index was down 6.06 points to 326.01 at 10:30 a.m. Monday, as the Dow Jones Industrial Average was off a greater 2.2 percent, or 190.38 points, to 8,608.88.
Wal-Mart was off 2.5 percent to $48.62. The discounter’s stock, which has held up better than most as consumers try to stretch their dollars, has traded as low as $46.25 and as high as $63.85 over the last year.
“Wal-Mart has and should continue to gain share across today’s still challenging consumer spending environment, but with ongoing expense pressures and tougher sales comparisons, we see little near-term positive catalysts to drive shares higher in the near-term,” said Adrianne Shapira, equity analyst at Goldman.
The downward pressure on U.S. stocks came after the Hang Seng Index in Hong Kong fell 2.1 percent and the Nikkei 225 in Tokyo dropped 1 percent for the day. In Europe, both the FTSE 100 and the CAC 40 were down in afternoon trading.
For complete coverage, see Tuesday’s WWD.