Stocks Lower After Wal-Mart Results

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Wall Street Lower After Disappointing Wal-Mart Results, Economic Reports

Wall Street pulled back on Monday as investors grew concern about the pace of consumer
spending after Wal-Mart Stores Inc. reported weaker-than-expected quarterly results.

The world's biggest retailer cut its profit outlook amid weak economic conditions that are crimping consumer spending. Home Depot Inc., the world's largest home improvement chain, said
Tuesday that weakness in the housing market caused its quarterly profit to slip almost 15
percent.

The pair of disappointing earnings reports offset government data released before the market
open that indicated that inflation remains in check. The Labor Department said wholesale prices rose in July for the fifth time in six months, while the Commerce Department said the U.S. trade deficit fell to a four-month low in June.

Despite the decline in major indexes, analysts said the tone of the market appears more stable
compared to the recent volatility triggered by a widening credit and debt crisis. The Federal
Reserve, which has injected some $64 billion of liquidity into the U.S. banking system since
Thursday, said Tuesday it stood ready to act again should market conditions warrant.

"Wal-Mart aside, you're still seeing a bit of stability in the market due to central banks around
the globe providing liquidity to the financial markets," said Mike Malone, a trading analyst at
Cowen & Co. "Given the fact there's very little visibility about how the economy and credit
markets will play out, this kind of market is encouraging because there is still a tremendous
amount of risk out there."

The European Central Bank injected another $10.5 billion into money markets on Tuesday and
said conditions were normalizing after several days of volatility. There was no action Tuesday by the Fed.

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Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.76 percent from 4.78 percent late Monday. The fixed-income market has risen as stock investors move into securities deemed less volatile.

The Labor Department reported its producer price index advanced 0.6 percent amid higher energy costs. Excluding often volatile food and energy costs, however, what's known as core PPI rose a modest 0.1 percent.

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The Commerce Department said the trade deficit fell because of highest-ever exports of farm
goods and automobiles offset a jump in energy prices. The trade deficit dropped to $58.1 billion in June, a 1.7 percent decrease from May and the lowest imbalance since February.

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