Stocks Fall a Fifth Straight Day on Walmart Miss, Jobless Claims

US stocks closed out their fifth straight day of losses, the longest slide since the turn of the year, after retail bellwether Walmart Inc. posted a rare profit miss, jobless claims ticked higher and a Federal Reserve official downplayed the need for a near-term interest-rate cut.

The S&P 500 Index sank 0.4% on Thursday, led by the consumer staples and utilities sectors. Shares of Walmart, the world’s largest retailer, dropped 4.5% after profits fell short of expectations for the first time in three years. The Nasdaq 100 Index declined 0.5%, while the blue chip Dow Jones Industrial Index retreated 0.3%.

“We are now in the midst of a big mean-reversion rotation, which is unfortunate because the earnings environment has been stunning,” said Louis Navellier, chief investment officer at Navellier & Associates Inc.

Official data showed applications for US unemployment benefits rose to their highest since June. At the same time, US manufacturing expanded at the fastest rate in three years and existing home sales rose. Yields on two-year Treasuries, the maturity most sensitive to expectations for Fed policy, climbed.

“The economic numbers in the US were all over the map this morning,” said Vital Knowledge founder Adam Crisafulli. However, he said the net effect was to “shift Fed expectations in a slightly hawkish direction.”

Traders are waiting for a speech Friday by Chair Jerome Powell for a clearer sense of whether the central bank will cut rates as soon as next month.

“It’s okay that the market is taking a little bit of a breather, especially as it’s waiting to get some really important data from the Fed,” Victoria Fernandez, chief market strategist at Crossmark Global Investments, said in a Bloomberg TV interview on Thursday.

To be sure, Goldman Sachs Group Inc.’s trading desk said the losses in high-flying momentum stocks may present a dip-buying opportunity.

Amid the selloff and cooling labor market, investors are monitoring the Fed retreat in Jackson Hole, Wyoming, where Powell will speak. Although there are signs the labor market is softening, inflation readings have come in elevated.

“Markets are overly confident in their expectations” for rate cuts by the Fed in September because the data ahead of the symposium “are not clear on the need for an immediate cut,” Stefano Pascale, a Barclays Capital Inc. global equity derivatives strategist, wrote in a Thursday note. He warned investors to be on the lookout for the “Jackson Hawk.”

Ahead of Powell’s speech, Kansas City Fed President Jeff Schmid said in an interview that aired Thursday that “modestly restrictive” rates at the moment have the Fed “on a good path.” Meanwhile, Atlanta Fed President Raphael Bostic said he sees one rate cut this year, and Cleveland Fed President Beth Hammack said she wouldn’t support a cut to rates if the decision was tomorrow.