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U.S.-listed shares of Alibaba gain after Q3 revenue beat

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Baxter International ( BAX ) jumps after guiding FY profit above

estimates

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Indexes down: Dow 1.39%, S&P 500 0.81%, Nasdaq 0.82%

(Updates with afternoon trading levels)

By Shashwat Chauhan and Sukriti Gupta

Feb 20 (Reuters) - Wall Street's main indexes fell on

Thursday, with the S&P 500 off record highs as a sell-off in

heavyweight retailer Walmart ( WMT ) and tech firm Palantir ( PLTR ) hit investor

sentiment, while the market assessed latest tariff threats from

U.S. President Donald Trump.

Walmart ( WMT ) slid 6% after the world's largest retailer

forecast sales and profit for the fiscal year ending January

2026 below analysts' estimates, as it anticipates

inflation-weary consumers to pull back after several quarters of

solid growth.

"(Walmart's ( WMT ) results) show that consumers are tightening

their wallets. It makes people think this a delayed reaction to

all the Fed rate hikes that have been going on over the past

year," said Michael Matousek, head trader at U.S. Global

Investors.

The company's forecast dragged down other major retailers

such as Target ( TGT ), Costco Wholesale ( COST ) and Dollar

Tree ( DLTR ), which fell between 1.4% and 5.6%.

Palantir Technologies ( PLTR ), which provides governments

with services such as software that visualizes army positions,

shed 9.7% after the Pentagon said on Wednesday it was looking at

potential budget cuts for the fiscal year 2026.

Matousek also said that Palantir's ( PLTR ) declines, coupled with

Walmart's ( WMT ), are "inducing people to sell out of fear."

Most megacap and growth stocks trended lower, with

Amazon.com ( AMZN ) and Tesla down more than 1% each.

The market is also reacting to Trump's Wednesday

announcement of fresh tariffs over the next month or sooner,

adding lumber and forest products to previously announced plans

involving duties on imported cars, semiconductors and

pharmaceuticals.

Since returning to office four weeks ago, Trump has imposed

an additional 10% tariff on all imports from China. He also

announced, and then delayed for a month 25% tariffs on goods

from Mexico and non-energy imports from Canada.

Last week, he unveiled plans to slap reciprocal tariffs on

all countries that have tariffs on U.S. goods.

Separately, minutes from the U.S. Federal Reserve's January

policy meeting showed on Wednesday that Trump's initial policy

proposals raised inflationary concerns at the central bank.

On Thursday, data showed that the number of Americans filing

new applications for unemployment benefits increased moderately

last week, suggesting that the labor market remained on solid

ground.

At 11:45 a.m. ET, the Dow Jones Industrial Average

fell 618.17 points, or 1.39%, to 44,009.42, the S&P 500

lost 49.68 points, or 0.81%, to 6,094.47 and the Nasdaq

Composite lost 164.40 points, or 0.82%, to 19,891.12.

Eight of the S&P 500's 11 sectors traded lower, with

financials leading declines with a 2% fall.

U.S.-listed shares of Alibaba Group advanced 7.4%

after the Chinese e-commerce firm topped expectations for

third-quarter revenue.

Hasbro ( HAS ) jumped 11.2% after the toymaker beat

quarterly profit and revenue estimates, while Baxter

International ( BAX ) gained 7.9% after the medical device maker

forecast 2025 profit above estimates.

Declining issues outnumbered advancers by a 1.69-to-1 ratio

on the NYSE, and by a 2.18-to-1 ratio on the Nasdaq.

The S&P 500 posted eight new 52-week highs and three new

lows, while the Nasdaq Composite recorded 47 new highs and 105

new lows.

(Reporting by Shashwat Chauhan and Sukriti Gupta in Bengaluru;

Editing by Maju Samuel and Shinjini Ganguli)