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 May 15, 2018 - 10:19 AM EDT
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Stocks Tumble as Home Depot Misses

Stocks Tumble as Home Depot Misses

U.S. stocks fell Tuesday morning after Home Depot reported quarterly sales that fell short of Wall Street's expectations and interest rates breached new highs.

The Dow Jones Industrial Average capsized 189.56 points to 24,709.85, led lower by Home Depot and Boeing.

The S&P 500 fell 22.12 points to 2,708.01, after market open amid losses in information technology and consumer discretionary stocks.

The NASDAQ dropped 79.58 points to 7,331.73, as Apple, Amazon, Microsoft and Google-parent Alphabet all fell more than 1%.

The slip in U.S. equities came after Home Depot reported first-quarter earnings that beat Wall Street's expectations, but missed estimates on the top line thanks to what the company categorized as a "slow start" to spring sales.

Spring is an especially important season for the home improvement retailer as shoppers traditionally stock up on gardening supplies and renovation materials. Customer transactions, however, fell 1.3% during the quarter. Shares fell 1.6% in early trading.

Stocks also slipped after the Commerce Department reported retail sales increased 0.3% in April, down from a 0.8% gain in March, which was revised higher. The solid read on consumer spending, however, was accompanied by an uptick in interest rates, a move some market watchers blamed for a further decline in equities.

Traders for the first time Monday assigned a 51% chance of a fourth interest rate hike this year by the Fed. The strong data Tuesday will only increase the ranks of traders and investors with that belief.

The Fed, tasked with keeping inflation around 2% and maintaining healthy employment levels, considers economic data when deciding whether to increase the benchmark federal funds rate. Despite a narrow CPI miss last week, personal consumption expenditures — the Fed's preferred inflation metric — is now near the central bank's target

Prices for the benchmark for the 10-year U.S. Treasury dipped sharply, raising yields to 3.06% from Monday's 3%. Treasury prices and yields move in opposite directions.

Oil prices gave back 40 cents a barrel to $70.56 U.S.

Gold prices dropped $25.50 to $1,313.60 U.S. an ounce.

Source: Livemoney (May 15, 2018 - 10:19 AM EDT)