US STOCKS-Wall St ends lower as weak Walmart guidance prompts consumer demand worries

Updates to market close

By Stephen Culp

NEW YORK, Feb 20 (Reuters) - U.S. stocks sold off on Thursday as ongoing tariff jitters and a downbeat forecast from Walmart dampened investor risk appetite.

A broad selloff pulled all three major U.S. stock indexes into negative territory, with the blue-chip Dow suffering the steepest loss. The S&P 500 snapped its two-day string of all-time closing highs.

Gold prices surged to a record high, suggesting a flight to safety amid mounting uncertainties.

Walmart WMT.N, the world's largest retailer, provided current fiscal year sales and profit forecasts that fell shy of analysts' expectations, which suggested dampening consumer demand.

"With the consumer driving 70% of the U.S. economy (Walmart's) weak guidance gave rise to some nervousness, regarding the health of the consumer and potential consumer spending going forward," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

"That led to maybe some selling pressure in shares of Walmart, which spread throughout the overall market," Pavlik added.

Walmart's shares ended sharply lower.

Walmart's results also provided a glimpse into how the company expects to fare under U.S. President Donald Trump's growing list of tariff announcements.

On Wednesday, that list was expanded to include lumber, autos, semiconductors and pharmaceuticals.

"You can't talk about uncertainty if you don't mention tariffs, right? That's been a very volatile headline," said Mike Dickson, head of research at Horizon Investments in Charlotte, North Carolina.

"Is Trump using this as a bargaining tool? Is he serious about it? Who's going to be impacted? You've seen a lot of that."

Recent economic data, including jobless claims and Atlantic region factory activity, suggested that the U.S. economy is in solid shape for now, in line with recent comments by Federal Reserve policymakers.

But some economists fear labor market disruptions are possible as a result of the thousands of federal employees recently fired by billionaire Elon Musk's Department of Government Efficiency (DOGE).

The S&P 500 .SPX lost 26.52 points, or 0.43%, to end at 6,117.63 points, while the Nasdaq Composite .IXIC lost 94.22 points, or 0.47%, to 19,962.03. The Dow Jones Industrial Average .DJI fell 450.69 points, or 1.00%, to 44,180.80.

Palantir Technologies PLTR.O, which provides governments with services such as software that visualizes army positions, declined after the Pentagon announcement on Wednesday that it was looking at potential budget cuts for the fiscal year 2026.

U.S.-listed shares of Alibaba Group BABA.N advanced following the Chinese e-commerce firm's consensus-beating third-quarter revenue.

Hasbro HAS.O jumped after the toymaker beat quarterly profit and revenue estimates.

Medical device maker Baxter International BAX.N jumped after the company provided a better-than-expected 2025 profit forecast.