BENTONVILLE, Ark. — A report that Wal-Mart Stores here was cutting back on inventory ahead of the holiday season appeared to pressure retail stocks on Wednesday.
The Bloomberg Business report said an unnamed vendor was expecting Wal-Mart to cut back on orders across several product categories as it enters the most important shopping period of the year. The report came after Wal-Mart had posted weaker-that-expected second-quarter sales and trimmed its sales outlook for the year.
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A Wal-Mart spokesman told the Wall Street Journal that the Bloomberg report was “completely false,” but acknowledged that its second-quarter inventory had been too high because of advance ordering for back-to-school season.
Investors appeared to interpret the Bloomberg report to indicate that sales during the upcoming holiday season could be weak overall based on Wal-Mart’s cutbacks, according to reports. The Dow Joes, Nasdaq and S&P Indices closed down 0.4%, 0.19% and 0.27%, respectively, on Wednesday. Almost all supermarket stocks tracked by SN fell, with the exceptions of Ahold, Fairway Holdings, Supervalu, and Natural Grocers by Vitamin Cottage.
Read more: Wal-Mart Dims Outlook After Soft Q2 Sales
Stocks might have also been impacted by the budget impasse in Congress, the reports said.
A Deloitte report earlier this week noted that holiday sales are expected to grow about 4.5% this year, about the same amount as last year.
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