US STOCKS-Wall St slides as weak Walmart guidance prompts worries about consumer demand

Updates to mid-afternoon

By Stephen Culp

NEW YORK, Feb 20 (Reuters) - Wall Street slid 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 sharply lower, with the Dow off more than 1% and the S&P 500 on track to snap its two-day string of record 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.

"Walmart tends to cater towards consumers who are most susceptible to inflation and they've done very, very well with huge demand for their products," said Mike Dickson, head of research at Horizon Investments in Charlotte, North Carolina.

"So the weakness in their forecast, combined with last week's pretty bad retail sales data, definitely gives markets a little pause regarding the strength of the consumer."

Walmart's shares slid 6.5%, while other large retailers Target TGT.N and Costco Wholesale COST.O lost 1.8% and 2.2%, respectively.

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," Dickson added.

"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 Dow Jones Industrial Average .DJI fell 572.12 points, or 1.28%, to 44,055.89, the S&P 500 .SPX lost 40.99 points, or 0.67%, to 6,103.15 and the Nasdaq Composite .IXIC lost 141.59 points, or 0.71%, to 19,914.89.

Among the 11 major sectors in the S&P 500, financials .SPSY were down the most, while energy .SPNY enjoyed the biggest percentage gain.

Palantir Technologies PLTR.O, which provides governments with services such as software that visualizes army positions, shed 6.9% 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 8.2% following the Chinese e-commerce firm's consensus-beating third-quarter revenue.

Hasbro HAS.O jumped 13.8% after the toymaker beat quarterly profit and revenue estimates.

Medical device maker Baxter International BAX.N gained 8.5% after the company provided a better-than-expected 2025 profit forecast.

Declining issues outnumbered advancers by a 1.44-to-1 ratio on the NYSE. There were 93 new highs and 67 new lows on the NYSE.

On the Nasdaq, 1,520 stocks rose and 2,807 fell as declining issues outnumbered advancers by a 1.85-to-1 ratio.

The S&P 500 posted 9 new 52-week highs and 3 new lows while the Nasdaq Composite recorded 50 new highs and 119 new lows.