Closing Market Report

Star-Bulletin news services

Wal-Mart warning
prompts Dow drop

The retailer said revenue growth will slow,
raising concerns of consumer spending

The Dow Jones Industrial Average fell, erasing its gain for the year, after a sales forecast by Wal-Mart Stores Inc., violence in Iraq and the threat of terrorist attacks raised doubts the market's rally will continue.

Wal-Mart, the world's biggest retailer, said revenue growth will slow this month, sparking concern that consumer spending will stall later this year, crimping the economic expansion that has underpinned a rise in corporate profits.

Since Sunday, more than 100 Iraqis and 30 U.S. soldiers and Marines have died, prompting U.S.-led coalition forces to conduct "multiple operations" to eliminate rebels and restore order in Iraq.

"If you want to worry about something, worry about second- half earnings," said Greg Tuorto, who helps manage more than $3.5 billion for Guardian Park Avenue Funds in New York.

"People are paying for the future, and not the present."

The Dow lost 38.12, or 0.4 percent, to 10,442.03. The benchmark is down 0.1 percent this year. The Standard & Poor's 500 Index shed 1.21, or 0.1 percent, to 1139.32. It is up 30 percent over the past year.

The Nasdaq Composite Index, which gets 40 percent of its value from computer-related shares, rose 2.64, or 0.1 percent, to 2,052.88. Yahoo! Inc. and Dell Inc. led the advance after the companies raised their sales forecasts.

Markets are closed tomorrow for Good Friday. Since last Friday, the Dow lost 0.3 percent, for the first decline in three weeks. The S&P 500 and Nasdaq each shed 0.2 percent.

The price of the Treasury's 10-year note closed down 1/4 point, while its yield rose to 4.19 percent from 4.16 percent Wednesday. Two-year Treasury notes fell 1/32 point and yielded 1.86 percent, up from 1.84 percent Wednesday.

Wal-Mart shed $1.29 to $56.69 and was the biggest contributor to the Dow's drop.

The company said sales growth will slow this month to the low end of a range of 4 percent to 6 percent. In March, sales at stores open at least a year increased 6 percent from a year ago.

Kohl's Corp. dropped $2.52 to $44.33, while Target Corp. fell 64 cents to $44.17.

"The problem is the perception about what's going to happen in Iraq," said Barry Savitz, a trader at Greenwich Prime Trading, which manages accounts for about 40 hedge funds in Greenwich, Conn.

"It's a long weekend, there's a war going on so there's a lot of uncertainty."

More than five stocks fell for every three that rose on the New York Stock Exchange. Some 1.19 billion shares changed hands on the Big Board, the second-slowest trading day this year.

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