Stocks are lower on Wall Street in afternoon trading Tuesday after Walmart warned that inflation was negatively impacting American consumers' spending power.

The S&P 500 was down 1.3% as of 2:42 p.m. Eastern, wiping out modest gains from a day earlier. The Dow Jones Industrial Average was down 247 points, or 0.8%, at 31,744 and the Nasdaq Composite slid 2%.

Walmart shares dropped 8.3% after the retail giant cut its profit outlook for the second quarter and the full year, saying rising prices for food and gas are forcing shoppers to cut back on more profitable discretionary items, particularly clothing.

Walmart's profit warning in the middle of the quarter is rare, and raised worries about how the highest inflation in 40 years is affecting the entire retail sector. Stocks of other major chains fell following Walmart's announcement, made after Wall Street's closing bell on Tuesday. Target dropped 4.2%, Macy's slid 6.5% and Kohl's fell 8%.

Investors have remained deeply concerned about inflation's impact on company profits and how it will affect U.S. consumers. While Americans' finances are relatively strong thanks to savings built up during the pandemic, those nest eggs are being spent on high gas and food prices.

The major indexes are coming off solid gains last week fueled by mostly better-than-expected reports on corporate profits. Falling yields in the bond market also helped, easing the pressure on stocks after expectations for rate hikes by the Federal Reserve propelled yields higher much of this year.

The central bank is expected to announce a rate hike of up to three-quarters of a percentage point on Wednesday, triple the usual amount. The central bank is waging an aggressive campaign to stem four-decade high inflation. The expected hike would put the Fed's benchmark rate in a range of 2.25% to 2.5%, the highest since 2018.

Bond yields were mixed Tuesday. The two-year Treasury yield, which tends to move with expectations for the Fed, rose to 3.04% from 3.02% late Monday. The 10-year yield, which influences mortgage rates, fell to 2.79% from 2.82%.

Technology stocks, retailers and communication companies were among the biggest drags on the benchmark S&P 500 index. Microsoft was down 3.5%, Amazon slid 5.3% and Facebook owner Meta Platforms dropped 4.5%.

The losses easily outweighed gains by health care and utilities stocks. Small company stocks also fell, sending the Russell 2000 0.6% lower.

Investors were eying the latest batch of corporate earnings reports.

Shares of automaker General Motors fell 3.1% after the company said its second-quarter profit fell 40% from a year ago, as computer chip and parts shortages hobbled factory output and drove the company's U.S. sales down more than 15%.

The Detroit automaker earned $1.67 billion from April through June, well below the $2.79 billion it made a year earlier. GM couldn't deliver 95,000 vehicles during the quarter because it lacked parts.

Shopify slumped 15.3% after the Canadian e-commerce company said it is cutting 10% of its staff, or about 1,000 employees, as it reckons with an unexpected sales downturn after pandemic-fueled growth.

Tech heavyweights Alphabet and Microsoft report their results after the closing bell, while Meta, Apple and Amazon report later in the week.

NEW YORK (AP) — Amazon on Friday announced it has agreed to acquire the vacuum cleaner maker iRobot for approximately $1.7 billion, scooping up another company to add to its collection of smart home appliances amid broader concerns from anti-monopoly and privacy advocates about Amazon's market power and ability to gain deeper insights into consumers' lives.

iRobot sells its products worldwide and is most famous for the circular-shaped Roomba vacuum, which would join voice assistant Alexa, the Astro robot and Ring security cameras and others in the list of smart home features offered by the Seattle-based e-commerce and tech giant.

The move is part of Amazon's bid to own part of the home space through services and accelerate its growth beyond retail, said Neil Saunders, managing director at GlobalData Retail. A slew of home-cleaning robots adds to the company's tech arsenal, making it more involved in consumers' lives beyond static things like voice control. The latest line of Roombas use sensors to map -- and remember -- a home's floor plan, offering a trove of data that Amazon could potentially integrate with its other products.

Amazon's Astro robot, which helps with tasks like setting an alarm, was unveiled last year at an introductory price of $1,000. But its rollout has been limited and has received a lackluster response.

Amazon hasn't had much success with household robots, but the iRobot acquisition and the company's strong market reputation provide a "massive foothold in the consumer robot market" that could help Amazon replicate the success of its Echo line of smart speakers, said Lian Jye Su, a robotics industry analyst for ABI Research.

Su said it also illustrates the shortcomings of consumer robotics vendors like iRobot, which struggled to expand beyond a niche product and was in a "race-to-the-bottom" competition with Korean and Chinese manufacturers offering cheaper versions of a robotic vacuum.

On Friday, iRobot reported its quarterly results. Revenue plunged 30% primarily on order reductions and delays, and the company announced it was laying off 10% of its workforce.

Amazon said it will acquire iRobot for $61 per share in an all-cash transaction that will include iRobot's net debt. The company has total current debt of approximately $332.1 million as of July 2. The deal is subject to approval by shareholders and regulators. Upon completion, iRobot's CEO, Colin Angle, will remain in his position.

Noting that iRobot has been running its robotics platform on Amazon's cloud service unit AWS for many years, Su said the acquisition could lead to more integration of Amazon speech recognition and other capabilities into vacuums.

In afternoon trading, iRobot shares rose 19%. Amazon's were down 1.7%.

The deal comes as anti-monopoly advocates continue to raise concerns about Amazon's increasing dominance. The purchase of iRobot is Amazon's fourth-largest acquisition, led by its $13.7 billion deal to buy Whole Foods in 2017. Last month, the company said it would buy the primary care provider One Medical in a deal valued roughly at $3.9 billion, a move that expanded its reach further into health care.

On Friday, groups advocating for stricter antitrust regulations called on regulators to block the iRobot merger, arguing it gives Amazon more access into consumers' lives and furthers its dominance in the smart home market.

"The last thing American and the world needs is Amazon vacuuming up even more of our personal information," said Robert Weissman, president of the progressive consumer rights advocacy group Public Citizen.

"This is not just about Amazon selling another device in its marketplace," Weissman said. "It's about the company gaining still more intimate details of our lives to gain unfair market advantage and sell us more stuff."

Landmark antitrust legislation targeting Amazon and other Big Tech companies has languished for months in Congress as prospects for votes by the full Senate or House have dimmed.

Last month, Sen. Amy Klobuchar, D-Minn., who heads the Senate Judiciary antitrust panel, urged the the Federal Trade Commission to investigate the One Medical acquisition, in the mold of other critics who've called on regulators to block the purchase over concerns about Amazon's past conduct and potential implications for consumers' health data. Regulators also have discretion to challenge Amazon's $8.5 billion buyout of Hollywood studio MGM, which was completed earlier this year.

Founded in 1990 by a trio of Massachusetts Institute of Technology roboticists, including Angle, iRobot's early ventures led to rovers that could perform military and disaster-relief tasks in the aftermath of the Sept. 11 attacks.

The profits from defense contracts allowed iRobot to experiment with a variety of other robots, producing some duds and one huge commercial success: the first Roomba, introduced in 2002, which pioneered the market for automated vacuum cleaners.

The company spun off its defense robotics division in 2016 to become almost exclusively a seller of vacuums and some other home robots, such as the Braava robotic mop. It planned to launch a robotic lawn mower in 2020 but backed off, citing problems tied to the pandemic.

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AP technology writer Matt O'Brien contributed to this report from Providence, Rhode Island.

Popular east coast grocer Wegmans has announced that it will end the self-checkout app it once tried citing a spike in shoplifting.

The app allowed customers to scan items while shopping and then bag and pay for the items, skipping a human cashier and bagger entirely.

The grocery store said in a statement, "Unfortunately, the losses we are experiencing prevent us from continuing to make it available in its current state."

The statement said, "We've made the decision to turn off the app until we can make improvements that will meet the needs of our customers and business."

Wegmans did not provide further details on the loss numbers or what changes the grocery store plans to make with the app.

Its "scan-and-go" app was made available to customers as online retail giant Amazon started to increase the prominence of its cashier-free Amazon Go stores in multiple locations.

The in-store shopping feature began to be adopted more by customers during the pandemic as shoppers looked for ways to have less contact with the public around them to reduce the spread of COVID-19.

The grocery store chain is found in select locations in the Washington, D.C.-area, New York, and in other areas on the eastern coast of the U.S.

It has what has been described as a cult-like following, with some high-profile names like U.S. Senator Chuck Schumer expressing their affinity for shopping there.

Amazon is facing a possible class action lawsuit in California after claimants allege that it illegally used the state's online sex offender database when conducting background checks on potential candidates for jobs with the company.

Law 360 reported that in one example, a registered sex offender filed documents in California federal court claiming Amazon used a background check provider, which illegally used information found on the state's sex offender database to deny him a job based on a past rape conviction.

The bias suit prevented the plaintiff and others from getting jobs with the company, including at its fulfillment centers, the lawsuit claims, as Reuters reported.

According to Bloomberg Law, the lawsuit, which targets both Amazon and the background check company it uses, could turn into a potential class action case against the two entities.

Miguel Lerma Jr. is named in the court filings as suing Amazon.com Services LLC, Amazon Logistics Inc, and Accurate Background Inc.

Lerma claims he worked at an Amazon fulfillment center in California as a seasonal employee. Still, his conditional offer for full-time employment was revoked when Accurate Background found out about his 2011 felony rape charge.

"Buy Nothing" groups have exploded in popularity. They can help people save money, cut down on waste and connect with their local community.

Idgie Watkins and Cathy Kusman-Kelly participate in their community "Buy Nothing" group. In their group, neighbors exchange items and services for free.

“Someone gave away plumbing work. We have a brand-new harmonica kit. We went from beds and furniture to household stuff, pots and pans,” said Kusman-Kelly.

Saving money wasn’t the original motivation behind the Buy Nothing Project.

Liesel Clark and her friend noticed plastics washing up on beaches near their Washington state home. They and their children logged all the plastics they were finding and learned they were coming from everyone.

“They’re coming from our homes, our cars, our workplaces.”

In 2013, the Buy Nothing Project started off as a social experiment to see if they could find items they might need or want from neighbors before purchasing something new.

People started sharing and giving right away. Soon, Liesel developed rules and guidelines for others to start their own hyper-local "Buy Nothing" groups. Now, there is an app that has grown to more than 6.5 million users nationwide.

Liesel says most people start by posting items they want to give away. She encourages people to ask for something they need before buying it.

“We’re challenging people to think creatively about how they might be giving to their loved ones," she said. "People share food even over the holidays. And this is a great time when people are traveling, you can borrow luggage.”

The Buy Nothing Project also offers free online courses to teach people how to grow this gift economy.

CNN —

Walmart's chief merchandising officer for its US operations is stepping down from the job as the retailer faces a tougher year ahead, an internal memo shared to US associates Friday said.

Charles Redfield, whose career at Walmart spanned 32 years, will transition on May 1 and remain in an advisory role. In a memo viewed by CNN Business, Walmart U.S. CEO John Furner said Redfield wants to spend more time with his family.

Redfield held his position at the retailer for a little more than a year, beginning in January 2022.

The leadership shakeup comes after America's largest retailer warned it is facing a more challenging year ahead and will approach 2023 with caution.

Despite a strong holiday season, Walmart forecasted slower sales and profit growth in February. Its strong holiday sales were fueled by groceries. Grocery prices rose 11.8% annually in December, pushing customers toward more affordable options.

However, sales were slower for traditional holiday products like toys, electronics and clothing — a sign that consumers are cutting back on discretionary spending.

Walmart did see an 8.3% sales increase during its latest quarter ended Jan. 31 at U.S. stores open for at least one year. More customers are buying its private label brands and more higher-income households are shopping at its stores, the company said.

"The consumer is still very pressured," Walmart CFO John Rainey told CNBC. "And if you look at economic indicators, balance sheets are running thinner and savings rates are declining relative to previous periods. And so that's why we take a pretty cautious outlook on the rest of the year."

The retail industry, in general, is expected to face challenges this year after sluggish holiday sales.

Redfield is a Walmart veteran. He began his career as a Sam's Club cashier while attending the University of Arkansas. He became assistant manager with Sam's Club and worked his way up the ladder.

"There are merchants, and then there's our Chief Merchandising Officer Charles Redfield," CEO John Furner said in a memo viewed by CNN Business. "I could probably stop there and many associates across our businesses and the retail industry would know exactly what I mean."

Redfield became CMO for Asda, Walmart's UK subsidiary, in 2010. In 2012, he was named executive vice president of merchandising for Sam's Club and named executive vice president of food for Walmart U.S. in 2015.

The Wall Street Journal first reported the departure.

Furner said the company will be announcing a new CMO soon.

This week, Walmart said it was selling its trendy menswear brand, Bonobos, at a steep loss, to management firm WHP Global and retailer Express Inc. for $75 million. Walmart acquired the brand in 2017 for $310 million.

In a note, Neil Saunders, managing director of consultancy GlobalData, wrote that discounted price for Bonobos "reflects the current weaker outlook across retail, but some is also the result of Walmart not having done much to develop the brand over the past six years."

New research shows U.S. teens who use electronic cigarettes prefer ones made by Juul Labs, and mint is the top flavor for many of them. That suggests a shift after Juul's sweeter flavors were removed from retail stores.

The results are in two studies published online Tuesday in the Journal of the American Medical Association. They include a U.S. government report based on a survey indicating that the U.S. teen vaping epidemic shows no signs of slowing down.

An estimated 28% of high school students and 11% of middle schoolers surveyed earlier this year had vaped within the past month. That amounts to over 5 million young users, versus about 3.6 million last year.

The results follow the Trump administration's call in September to ban virtually all vaping flavors.

FRANKFORT, Ky. — City and county governments across Kentucky can apply for part of $300 million in CARES Act funding for coronavirus response starting Thursday, Gov. Andy Beshear announced at his Wednesday news conference.

Watch a replay of the briefing in the player below:

To apply, local governments with COVID-19-related expenses from March 1, 2020 to Dec. 30, 2020. These expenses can include personal protective equipment, food delivery to nursing homes and vulnerable populations, necessary telework and communications improvements, and others.

“Local governments have been instrumental in the fight against COVID-19 and are a lifeline in our local communities,” Beshar said.

Local governments must apply with expense documentation on DLG’s website Thursday at 8 a.m. Funding will be allocated to governments based on population size.

Retail reopens at 33% capacity

Beshear said initial reports Wednesday indicated people have followed social distancing and cleaning guidelines in retail stores so far.

"This is how we do this right," Beshear said.

With two weeks of data, Beshear said he hopes the state will be able to increase the number of people allowed inside a store at one time. Currently, retailers can host customers at 33% capacity.

Officials recommended that customers follow social distancing guidelines, wear masks and limit the amount of time they are inside retail stores.

Malls and flea markets can also reopen Wednesday as long as staff at entrances and exits keep occupancy at 33% and adhere to cleaning guidelines. Individual stores must also enforce 33% capacity, Beshear said. Mall food courts must follow the same requirements set for restaurants.

Funeral homes were also permitted to reopen Wednesday, and houses of worship could once again host limited-capacity in-person services.

Ky. case numbers and testing

Beshear reported 10 new virus-related deaths Wednesday, and there have been 376 virus-related deaths among 8,167 total positive COVID-19 cases statewide. NKY Health reports 999 total local cases and 57 virus-related deaths as of Wednesday.

More than 2,900 people have recovered from coronavirus, and more than 158,600 people have been tested.

Beshear said that the numbers for the last few weeks have been stable, and that as more Kentuckians get back to work this month, he is confident the state's healthcare system could handle a "second wave" of cases.

“I am encouraged that the number of days that it has taken to stabilize people is a lot lower than was ever anticipated," he said. “Our healthcare professionals have proven that they can get people in, get people better and get people out a lot sooner than anybody had expected.”

Residents of long-term care facilities testing positive for COVID-19 statewide hit 1,002 plus 461 staff, Beshear said Tuesday. So far, 205 residents and two staff members have died since outbreak began, accounting for roughly 60% of the state's total deaths due to COVID-19.

On Wednesday, Public Health Director Dr. Steven Stack announced that the state is administering tests in 23 long-term care facilities. The state is also issuing over 2 million pieces of personal protective equipment to 280 facilities around Kentucky, including 209,900 items of PPE like masks, face shields, gloves and gowns sent to Northern Kentucky.

A free drive-thru COVID-19 testing site will remain open in Erlanger at 25 Atlantic Ave this week. You can call 1-800-737-7900 to schedule an appointment.

For a complete list of coronavirus testing sites in Kentucky, click here.

4 children with COVID-19-related syndrome

Beshear announced that a 5-year-old and an 11-year-old have now contracted a coronavirus-related "pediatric multi-system inflammatory syndrome" on Monday. Beshear said the 5-year-old has since been released from a local hospital, and the 11-year-old remains hospitalized.

State leaders had previously announced that a 10-year-old and a 16-year-old had contracted the new syndrome which first appeared in New York.

Department of Public Health Commissioner Dr. Steven Stack said the 10-year-old in Kentucky had been put on a ventilator in critical condition due to a COVID-19-related inflammatory syndrome that affects young people. Beshear said that the child has been taken off a ventilator as his condition improves. The 16-year-old had been released from the hospital.

Stack said symptoms of this immune system syndrome vary and appear weeks after the child recovers from COVID-19. Possible symptoms include fever, rash, abdominal pain mimicking appendicitis, gastrointestinal problems and respiratory problems.

Stack advises parents call the Kentucky Pediatric Hotline at (800) 722-5725 for questions and more information.

What else opens in Kentucky this week?

Restaurants can reopen at 33% capacity with outdoor seating starting Friday.

Beshear said bars will likely remain closed until July because it's harder to regulate social distancing inside bars than in restaurants, but bars can still operate as restaurants by offering food service at tables outside.

Additionally, the governor's restrictions on interstate travel will expire Friday.

TIMELINE: Kentucky, Ohio and Indiana reopening plans

Weary retailers continue to battle pandemic uncertainty as the delta variant causes new spikes in coronavirus infections. But for now, at least, expectations for a merry holiday season remain intact.

What's happening: Data published Thursday is expected to confirm that U.S. retail sales declined for the second straight month in August.

But new forecasts from Deloitte, Bain & Company and Mastercard predict a huge sales boom in the coming months, the most important time of the year for retailers.

Deloitte estimates that holiday sales will increase between 7% and 9% in 2021 as vaccinations help shoppers feel more comfortable venturing out to spend some of the cash they've been hoarding.

"A steady decline in the savings rate to pre-pandemic levels will support consumer spending and keep retail sales elevated this season," said Daniel Bachman, Deloitte's U.S. economic forecaster. "Further, e-commerce sales will continue to grow as consumers demonstrate an ongoing and steady movement toward buying online across all categories."

The consulting firm expects online sales to jump between 11% and 15% year-over-year, reaching up to $218 billion.

Mastercard, for its part, sees U.S. retail sales rising 7.4%. While online shopping could rally 7.6%, in-store shopping is expected to increase by 6.6% compared to 2020. Bain & Company is also calling for a 7% sales growth rate in November and December.

"The pandemic has impacted nearly every inch of the retail industry," said Aaron Cheris, the head of Bain & Company's Americas Retail practice. "However, heading into this holiday season, we also see important tailwinds for nominal retail growth, including boosts from inflation, rebounding employment, healthy savings rates and wage growth."

But wait: Supply chains remain badly tangled, causing shipping costs to soar. Some companies worry that empty shelves and shortages of in-demand products could dampen the mood.

"The demand is going to be there," MGA Entertainment CEO Isaac Larian told CNN Business late last month. "What is not going to be there is the product to fill the demand."

Mastercard thinks retailers will try to get around supply chain concerns, as well as persistent difficulties in hiring workers, by offering earlier holiday promotions in stores and online — particularly for electronics and clothing items.

"This holiday season will be defined by early shopping," Steve Sadove, senior advisor for Mastercard, said in a statement.

Investor insight: A spending surge would be good news for retail stocks, which shot up earlier this year but have been caught in a holding pattern in recent months. The SPDR S&P Retail ETF is up 45% year-to-date, but has shed 4.4% in the third quarter.

U.S. retail sales for August will provide a crucial look at how spending amidst the delta variant is holding up in advance of the holiday season. A consensus estimate from Briefing.com predicts retail sales dropped 0.7% after declining 1.1% in July.

Data released earlier this week from China showed that retail sales struggled in August, increasing just 2.5% compared to a year earlier. That was much weaker than expected and a dramatic slowdown from the 8.5% uptick recorded in July.