The Dow Jones Industrials (DJINDICES:^DJI) weren't able to set their third record close of the week Wednesday, falling 101 points after a sharp upward run that carried the index to new heights. Meanwhile, even though all but a few Dow stocks have already reported earnings, Thursday morning's report from Wal-Mart (NYSE:WMT) could say a lot about how it and other top retailers in the nation have fared in a brutal winter and its subsequent aftermath. Given the impact that consumers have on the overall economy, Wal-Mart's read could easily have a major influence on the entire Dow Jones Industrial Average.
Wal-Mart will issue its press release tomorrow morning at about 7 a.m. EDT. The retailer doesn't offer a live conference call, but Wal-Mart prerecords a management review of its results and releases the phone call and transcript at the same time as its regular earnings report.
Wal-Mart has been in a difficult position from a fundamental standpoint for a long time, as the giant big-box retailer faces competition on multiple fronts. Investors expect only tepid growth rates from Wal-Mart on earnings and sales and can only hope that same-store sales figures domestically will finally start to improve after a slight drop during the holiday quarter. However, the company has previously said that it expects relatively flat performance in the fiscal first quarter as well.
One interesting thing about Wal-Mart is that the company's attempts to bolster its e-commerce division in order to respond to pressure from Amazon.com (NASDAQ:AMZN) have actually produced some increased growth. Wal-Mart's overall Internet-based sales rose 30% in its just-ended fiscal year, and although that growth comes from a far smaller base, it still outpaces that of Amazon's online business. Still, ramping up its e-commerce presence to face off against Amazon could be expensive, with the need for capital spending to make its online site more attractive and user-friendly for shoppers.
More broadly, one thing that Wal-Mart has lacked is a strong international business. Around the world, many companies are capitalizing on emerging market growth to support their own flagging growth in more developed markets. Yet Wal-Mart's shopping experience hasn't always translated well in different cultures, and it's been surprising the extent to which the Wal-Mart concept has run into roadblocks within certain countries.
With Wal-Mart's quarter including the cold winter months of February and March, it could be challenging for the retailer to post a huge rebound in revenue and net income. Yet with expectations so low, even the beginning of a turnaround could send Wal-Mart higher and take the entire Dow Jones Industrial Average with it.
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Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Amazon.com. The Motley Fool owns shares of Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.