Wall Street slid as US companies including Best Buy and Citigroup reported results that fell short of expectations, fuelling concern some valuations are not justified by the outlook.
In afternoon trading in New York today, the Dow Jones Industrial Average dropped 0.43 per cent, the Standard & Poor's 500 Index fell 0.24 per cent, while the Nasdaq Composite Index edged 0.04 per cent lower. Slides in shares of Wal-Mart, last down 1.1 per cent, and those of Chevron, last 0.3 per cent weaker, led declines in the Dow.
Shares of Best Buy got pummelled, last down 28 per cent, after the company reported a drop in US holiday sales and said fourth-quarter operating margins will be lower than last year.
"[O]ur holiday revenues were negatively impacted by a number of factors, including: the aggressive promotional activity in the retail industry during the holiday period, which we believe did not result in higher industry demand and had a deflationary impact on our revenue; supply constraints for key products; significant store traffic declines between "Power Week" and Christmas; and a disappointing mobile phone market," Best Buy President and CEO Hubert Joly said in a statement.
Other companies reporting earnings that missed the mark included Citigroup, pushing shares down 4.4 per cent.