Warnings of slower sales sends Dow down 200 points
Warnings of weaker sales from big companies and a jump in long-term interest rates drove the stock market lower early Thursday.
Before the start of trading, Wal-Mart cut its estimates for annual sales and profit, warning that cautious shoppers are spending less. The news followed a revenue forecast from Cisco Systems late Wednesday that was weaker than Wall Street expected.
An hour after the opening bell, the Standard & Poor's 500 index was down 24 points, or 1.4 percent, to 1,661.
The selling swept across all 10 industry groups in the index, and all but 16 of the index's 500 stocks were down.
The Dow Jones industrial average lost 217 points, or 1.4 percent, to 15,121. The Nasdaq composite index fell 62 points, or 1.7 percent, to 3,608.
Wal-Mart fell $1.81, or 2 percent, to $74.62, after the world's largest retailer cut its profit and revenue expectations for 2013. It reported second-quarter results that missed Wall Street's estimates.
Cisco Systems announced plans to cut 5 percent of its workforce, roughly 4,000 employees, as sales slow. CEO John Chambers called the global economy "challenging and inconsistent." Cisco plunged $1.88, or 7 percent, to $24.50.
Major stock indexes have slumped more than 1 percent for the week. The Dow is down 1.6 percent and the S&P 500 1.3 percent.
The indexes are still up sharply for the year and hit all time-highs on Aug. 2. The Dow is up 16 percent in 2013; the S&P 17 percent.
In the market for U.S. government bonds, the yield on the 10-year note jumped to 2.79 percent, the highest level since July 2011.
Higher long-term interest rates hit real-estate stocks, because the yield on the 10-year U.S. government bond acts a benchmark for interest rates on mortgage loans. A sharp increase in mortgage rates could cool demand for new houses and squelch a recovery in the housing market.