"The market is vulnerable to negative news. You have the market watching dysfunction in Washington in real-time, and it's been choppy and down five days in a row, and then you introduce a new catalyst with Wal-Mart and it represents a large part of the consumer," said Art Hogan of Lazard Capital Markets. The S&P 500 was off for a fifth day, its longest losing streak of the year. The S&P fell 4 points to 1692.
"It certainly is a reminder the consumer isn't as robust as it was in the second quarter," said Hogan. "We didn't have a robust back-to-school season, and that's usually a precursor to holiday shopping season."
Wal-Mart stock and the overall market recovered some losses after the Wal-Mart comment but the sour tone persisted, as many trading rooms were tuned into the activities in the Senate.
(Read more: Wal-Mart: Slashed orders report 'completely false')
There are some important economic reports Thursday, including jobless claims at 8:30 a.m. ET and the third look at second quarter GDP, which is expected to improve to 2.8 percent from 2.5 percent. Jobless claims are expected at 330,000 after last week's 309,000. Pending-home sales are expected to show a decline of 1.4 percent in August. Nike, another important measure of the consumer and a new Dow component, reports earnings after the bell.
While traders will be watching those reports, they are also watching Washington, where Sen. Ted Cruz, R-Texas, spoke for 21 hours against Obamacare. The Senate, however, moved on to advance legislation that would fund the government and avert a shutdown but not defund Obamacare, as the House bill would do. How the Senate and House come together has yet to be seen and must be resolved by the Monday midnight deadline.
(Read more: Defunding Obamacare is 'not in the cards': Corker)
The quarter end is also upon markets, and various Wall Street strategists have made predictions of how pension funds will maneuver by the close of markets Monday. UBS strategists forecast that defined pension plans should be significant sellers of stocks and buyers of fixed income. "We see $35-41 billion range for equity sales by pensions with US large cap share at $15-$18 billion, followed by US small cap with projected $8-10 billion sales," they wrote in a note.