Transcript for Wall Street Tumbles on Walmart, Cisco Reports
This is a special report from ABC news. Hello I'm tired and is in New York with an ABC news digital special report stocks are -- propping this afternoon. Let's take a look at the -- in action. We'll take a look at the second -- it is down 170 points at one point it was down more than 200. For more on what is -- Wall Street down we're joined live by Yahoo! finance is -- knew -- Rick what's not. Contact well it's all about I think it's all about the Federal Reserve. As he usually is these days even though the Fed hasn't -- anything new today. We got a bunch of economic indicators. That show that the labor market is improving that's good news for the economy. Inflation is holding steady it's really not a problem. And yet we're seeing some. Some poor earnings reports from some big companies such as Wal-Mart and Cisco. So what everyone's trying to figure out is how is this going to affect the Fed's decisions about. Quantitative easing which they -- going to start pulling back on at some point in the future will it be in September at their next meeting will be in December -- in 2014 nobody knows but. All these things take -- -- suggest that the Fed. Could have reason to start pulling back on that big bond buying program sooner rather than later -- that's why we're seeing concern about stocks right now. You know what might be confusing -- some people is that you know these economic indicators like unemployment and housing in the Consumer Price Index. Which measures inflation are good but they're not. Right I mean this isn't something that she you know should necessarily make people think the Fed is -- pull the trigger right away or not -- That's right nothing dramatic as showing up in any of these figures they're all moving inside. A fairly narrow range that tells us what we already know -- is that. Keep the economy's improving slowly and that's basically what all these indicators show us today they're mostly in line with other indicators that say. Things are getting better pretty slowly. The big question is really. Will the Fed actually take this one big step. Which is to basically change direction it's a direction it would be a directional change by the Fed it's going to happen sooner or later the whole question is -- and and the action today suggests that traders are betting it's going to happen sooner rather than later. Now we got some good news on foreclosure rates which seem to be going now looks like we sort of bottomed out there but there's also sent. New news in terms of home building what can you tell us about that. -- homebuilders are optimistic we're seeing this home builder index which basically asks the people who who are directly involved in the housing market. Do you think things are getting better or worse and if they're getting better how much better. This reading is coming in strong these days things look pretty good for home builders. I think this index is at the best level it's been in about six years so that says -- from that perspective. Things are getting better and again one of the things this very easy fed policy has been trying to accomplish is to restart the housing market. So we're seeing signs that. Yet this is yet another sign the housing market is actually restarted so in a way. The Fed -- Fed's policy has finally started to accomplish what has been trying to do for -- last five years or so so. Another reason for the Fed possibly to say mission accomplished -- we can start backing out. You know what's interesting is that Americans may be made -- are ready to start looking into buying homes again but at the same time. With Scott places like Wal-Mart and Macy's it's disappointing earnings report -- the start be back to school shopping season. So how is this playing out. Well this is a two track recovery and again this also is something that's not new. But we are seeing some elements of the housing market recover there's no doubt -- the economy rather recover. And that's basically people who have jobs. Or -- or maybe even in a subset of that which is people that have full time jobs -- guy decent paying jobs. There's another a big part of the time it it is without a doubt still struggling we still have very high unemployment we still have a lot of people. Who aren't working as much as they -- or not earning as much as they used to before the recession. And I think that is what showing up in the earnings of Wal-Mart for instance. Some analysts are saying look Wal-Mart shoppers are basically running out of money before their next patient check shows up and that's. Revealing itself in wal mart's earnings so you know Wal-Mart is middle America. -- including a lower income earners. And you know those people are clearly struggling so this is why we have this is why we haven't a recovery that's going so slow and hasn't picked up steam even -- It should have by historical standards and there's no reason to think it will pick up steam especially when you see Wal-Mart you know clear the biggest retailer in the world clearly -- reflects what's going on with many many consumers. Poor results they're saying we're we're expecting lower earnings in the future. You now so this pick in this recovery is not going gangbusters anytime soon. So -- we see the Dow is on -- -- shaky ground today how is the S&P 500 index doing. Same as the Dow it's down by over one percentage point. Stocks have been vacillating Almonte they're not -- you know there's been nothings pushing -- strongly one way or another so we finally got something today that said. It's a little bit shaky it's worth keeping in mind stocks are up I think it's about 18% for the year still so far it's been a terrific year for stocks it's not surprising we're where we don't we're seeing some pullbacks -- to -- some more -- pullbacks along the way as well. -- -- let's take one last look for performing now. And every note down to 179. Points and still in the negative territory -- Rick Newman. From Yahoo! finance thanks again for joining us sure thing. This has been an ABC news special report -- Hernandez in New York thank you for watching. This has been a special group. Report from me.
This transcript has been automatically generated and may not be 100% accurate.