By Leslie Josephs 

U.S. stocks stumbled Wednesday after a gloomy earnings forecast from Wal-Mart Stores Inc. weighed on shares of consumer-focused companies.

The Dow Jones Industrial Average dropped 157.14 points, or 0.9% to 16924.75. The S&P 500 lost 9.45 points, or 0.5% to 1994.24. The Nasdaq Composite fell 13.76, or 0.3%, to 4782.85.

Wal-Mart shares tumbled 10.04%, or $6.70 to 60.03, - the lowest closing price since May 2012 - after the retailer predicted a sharp drop in earnings next year. Wal-Mart's tumble shaved almost 45 points off the Dow and was the company's biggest one-day percentage loss since January 1988.

The outlook fuelled more selling in consumer stocks. Investors had already been grappling with weaker-than-expected U.S. retail sales growth of 0.1% in September.

The S&P consumer staples index fell 1.1% while its consumer discretionary index dropped 1%.

"The strength of the consumer in the U.S....is being questioned," said Kate Warne, investment strategist at Edward Jones.

The yield on the 10-year Treasury note dropped below 2% for the first time in two weeks as demand for haven assets rose. Yields fall as prices rise. Gold futures rose for a fourth session, adding 1.2% to end at $1,180.10 an ounce.

Other retailers were not immune to the selloff. Target fell 1.69, or 3.3% to 49.11. Dollar General fell 2.86, or 4.21% to 65.11. Best Buy fell 2.21, or 6% to 34.83.

"Retail investors and general consumers are uncertain and are anxious," said Omar Aguilar, chief investment officer for equities at Charles Schwab Investment Management.

The U.S. economy continued to expand at a modest pace at the end of the third quarter, though activity slowed or declined in some pockets as the stronger dollar weighed on some employers, the Federal Reserve said Wednesday European shares followed Asian markets lower after data showed lower-than-expected Chinese inflation in September, a day after disappointing import and export data from China dented stocks around the world. The consumer-price index rose 1.6% in September from a year earlier, compared with a 2% rise in August.

One outlier in Wednesday's broad decline, TripAdvisor, surged 17.03, or 25.5% to 83.72 after Priceline Group Inc. agreed to list some of its travel websites on TripAdvisor.

Investors were also grappling with mixed earnings reports.

J.P. Morgan Chase & Co. shares ended 1.56, or 2.6% lower, at $59.99 after the bank missed analysts' third-quarter estimates. J.P. Morgan reported after market close on Tuesday.

Bank of America Corp. shares rose 12 cents, or 0.8% to $15.64 after the bank beat analysts' expectations for third-quarter earnings.

The Stoxx Europe 600 fell 0.9%, deepening losses from Tuesday.

Most Asian indexes declined amid fears Beijing would miss its year-end growth target. The Shanghai Composite Index closed 0.9% lower, while Hong Kong's Hang Seng Index lost 0.7% and Japan's Nikkei Stock Average fell 1.9%. China's third-quarter growth figures are due for release on Monday.

In currencies, the euro was recently up 0.8% against the dollar to $1.1474, while the dollar was 0.8% lower against the yen at Yen118.85.

Brent crude oil was down 0.2% at $49.47 a barrel.

Write to Leslie Josephs at leslie.josephs@wsj.com

 

(END) Dow Jones Newswires

October 14, 2015 17:15 ET (21:15 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.