NEW YORK (AFP) – Wall Street’s five-day streak of records ended with a thud on Tuesday (Aug 17) following a lacklustre US retail sales report that exacerbated worries about the latest Covid-19 wave.

Retail sales in the United States fell a surprising 1.1 per cent in July compared to June, a far bigger drop than analysts were expecting and mostly the fault of a steep decline in auto sales, the Commerce Department reported.

The anaemic sales figure proved a catalyst for a sell-off after both the Dow and S&P 500 notched successive records over the last week.

Investors “found enough of an excuse to dial things back,” said analyst Patrick O’Hare in an interview, adding “the market was due for a pullback.”

The Dow Jones Industrial Average dropped 0.8 per cent to 35,343.28.

The broad-based S&P 500 shed 0.7 per cent to 4,448.08, while the tech-rich Nasdaq Composite Index fell 0.9 per cent to 16,700.07.

The retail sales report came as rising Covid-19 cases prompt fresh restrictions in some parts of the United States.

However, analysts do not expect severe restrictions comparable to those enacted in the country at the outset of the pandemic last year.

But a wildcard is whether outbreaks in China and other key exporting countries worsen supply chain problems that could lead to more inflation, O’Hare said.

Wall Street drops on weak retail sales

Tourism-related companies had an especially ugly day, with cruise giant Carnival losing 3.3 per cent, Marriott International shedding 2.1 per cent and United Airlines dropping 2.2 per cent.

Aircraft manufacturer Boeing was also punished again, slumping 3 per cent.

Walmart finished flat after reporting better-than-expected earnings, while Home Depot gave up 4.3 per cent as investors saw signs in the company’s earnings report that surging demand for home improvement investments may be ebbing.