* Wal-Mart falls after weaker-than-expected results
* Chinese stocks slump, yuan devaluations fears resurface
* Disney falls on downgrade, Apple down on China fears
* Home Depot, TJX at record highs after results
* Indexes down: Dow 0.3 pct, S&P 0.3 pct, Nasdaq 0.4 pct (Updates to open)
By Tanya Agrawal
Aug 18 (Reuters) - Wall Street open lower on Tuesday, weighed down by a 6 percent slump in Chinese shares and Wal-Mart’s weaker-than-expected quarterly results.
Wal-Mart shares fell as much as 3.2 percent to a nearly 2-1/2 year low of $69.58 and were the biggest drag on the Dow Jones industrial average.
Disney fell 1.1 percent to $107.86 after a Wells Fargo downgrade and weighed on the S&P 500 and the Dow. Apple , for whom China is a key market, fell 0.5 percent to 116.60 and was the biggest drag on the Nasdaq and the S&P 500.
Chinese stocks plunged again as the yuan weakened against the dollar, reigniting fears that Beijing may be intent on a deeper devaluation of the currency despite the central bank’s reassurances.
The People’s Bank of China devalued the currency last week by nearly 2 percent, triggering an avalanche of selling by investors across the world who feared Beijing wanted to engineer a much sharper decline to support weak exports.
“The problem in China is that the markets haven’t been released for free and open trading and until that happens there is going to continue to be downside pressure,” said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas.
At 9:46 a.m. ET (1346 GMT) the Dow Jones industrial average was down 44.33 points, or 0.25 percent, at 17,500.85, the S&P 500 was down 5.88 points, or 0.28 percent, at 2,096.56 and the Nasdaq composite was down 20.02 points, or 0.39 percent, at 5,071.68.
Seven of the 10 major S&P sectors were lower, with the energy index’s 0.6 percent fall leading the decliners. U.S. oil prices and industrial metals, including copper, traded near six-year lows, amid worries over China’s outlook.
The S&P consumer discretionary index was the biggest gainer, up 0.33 percent, boosted by Home Depot.
Home Depot rose as much as 2.5 percent to a record high of $122.64 after the home improvement retailer’s quarterly same-store sales increased more than expected.
Home improvement companies and home builders are enjoying a spot in the sun from strong results and economic data.
Data on Tuesday showed U.S. housing starts rose to a near eight-year high in July as builders ramped up construction of single-family homes. This follow a Monday report showing U.S. homebuilder sentiment in August rose to a near decade-high.
Economic data points are being carefully evaluated by investors to gauge when the U.S. Federal Reserve will raise interest rates.
Although the U.S. economy appears to be stabilizing, the effect of the yuan devaluation and other macro factors are playing on investor’s minds.
Investors are still not fully convinced the Fed will raise rates in September, but most are betting a rate hike will occur by the end of year. With the earning season winding down, all eyes are on the Wednesday minutes of the Fed’s latest meeting.
Among retailers, TJX Cos, jumped 6.7 percent to a lifetime high of $76.43 after it reported higher quarterly sales.
National Penn Bancshares rose 16.3 percent to $12.70 after BB&T said it would buy the bank for about $1.8 billion. BB&T fell marginally to $40.08.
Declining issues outnumbered advancing ones on the NYSE by 1,913 to 799. On the Nasdaq, 1,515 issues fell and 766 advanced.
The S&P 500 index showed 28 new 52-week highs and seven new lows, while the Nasdaq recorded 37 new highs and 33 new lows. (Reporting by Tanya Agrawal in Bengaluru; Editing by Savio D‘Souza)