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Actionable news in WMT: WAL-MART STORES Inc,

Dow Trades Lower as Wal-Mart Slumps


NEW YORK (TheStreet) -- Stocks were modestly lower by late morning Wednesday after Wal-Mart (WMT - Get Report) warned its profit would likely take a hit next year.

The S&P 500 was down 0.31%, the Dow Jones Industrial Average slipped 0.55%, and the Nasdaq fell 0.28%.

Wal-Mart shares slumped more than 8% after the world's largest retailer said that investments in technology and wage increases would likely lead to a decline in earnings in 2016. Wage increases are expected to add $1.2 billion in costs over 2016. Sales next year are expected to come in flat before growing between 3% and 4% over the next three years. Wal-Mart was trading at its lowest level since mid-2012.

Equity markets were already under pressure as investors fretted over weak consumer spending data that backed up recent weakness seen in the U.S. economy over the third quarter.

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Retail sales rose just 0.1% in September, up slightly from a flat reading in August. The reading was as economists expected, though still looked weak as consumers held onto their cash during summer's end. Auto sales remained strong, up 1.7%.

Core sales, which strip out autos, gas and food, fell 0.1% after a downwardly revised 0.2% decline in August. Core sales most closely resemble the consumer spending measure used to calculate GDP. On the upside, weakness in core sales makes a Federal Reserve move in the near-term even more unlikely.

"The main takeaway from this report is to both reinforce the view that a rate hike in October is a zero-percent probability event while also providing fodder for those arguing the economy...