By Adam Shell | USA Today
NEW YORK — Last week, Wal-Mart, the nation's biggest retailer, told Wall Street it didn't think it would ring up as many sales and make as much money in the latter half of 2013 than it had originally expected.
Wall Street took the news badly, chopping more than 225 points off the Dow Jones industrial average on Thursday.
Wall Street is wondering if the fallout from the earnings warning, dubbed the "Wal-Mart Effect," will spread to other U.S. retailers.
A slew of retail earnings reports out this week, starting Tuesday with beleaguered department store chain J.C. Penney, home improvement giant Home Depot and gadget retailer Best Buy, will give investors a good idea as to whether consumers are still opening their wallets and spending.
J.C. Penney is a mess, though, thanks to a recent boardroom brawl and a turnaround plan still in its infancy stage. So don't read too much into their report, which analysts expect to be bleak, with a loss of $1.06 a share.
Home Depot, however, could shed light on how rising interest rates are affecting consumers' purchases of home-related goods.
Similarly, rival Lowe's reports earnings Wednesday as well. Analysts expect both companies to boost earnings roughly 20% vs. the same period a year ago.
Investors will also be watching what CEOs say this week about the back-to-school selling season. Key stocks: Target, which reports Wednesday, and apparel sellers Abercrombie & Fitch and Gap, which report Thursday.