Wall St falls as growth stocks fall, Target weighs on retail stocks

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, Aug. 15, 2022. REUTERS/Brendan McDermid

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  • US retail sales flat in July; core sales up
  • Retailer Target’s quarterly profit slumps
  • Indices down: Dow 0.57%, S&P 0.79%, Nasdaq 1.17%

Aug 17 (Reuters) – Wall Street’s major indices fell Wednesday with growth stocks under renewed pressure as bond yields rose for minutes after the Federal Reserve’s July meeting, while weak Target results dragged the retail sector down.

Retail revenues have been mixed so far this week, with Target Corp (TGT.N) falling 2% after reporting a 90% drop in quarterly profits as inflation-hit customers curtail spending on discretionary goods. read more

The S&P 500 retail sector (.SPXRT) fell 1.2%, after a 1.9% jump in the previous session on encouraging quarterly results from Walmart Inc (WMT.N) and Home Depot Inc (HD.N).

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Data showed US retail sales were flat in July as falling gasoline prices weighed on receipts at gas stations. However, consumer spending appeared to be holding up, further alleviating fears that the economy was already in recession. read more

“We need to see a real decline in inflation,” said Brian Overby, senior market strategist at Ally. “The retail market space, since earnings came out this week, does not confirm the fact that inflation has peaked.”

High-growth and tech stocks like Amazon.com Inc (AMZN.O) and Nvidia Corp (NVDA.O) each fell nearly 2% as US Treasury yields rose for the second straight session.

Nine of the 11 major S&P 500 sectors fell during early trading, with communications services (.SPLRCL) and consumer goods (.SPLRCD) leading the way.

At 9:51 a.m. ET, the Dow Jones Industrial Average (.DJI) fell 194.64 points or 0.57% to 33,957.37, the S&P 500 (.SPX) fell 34.07 points or 0.79% to 4,271, 13 and the Nasdaq Composite (.IXIC) fell 152.85 points, or 1.17%, to 12,949.70.

The focus was on the release of minutes from the US Federal Reserve meeting in July, which could provide clues as to the magnitude of further rate hikes after policymakers were adamant they would continue to raise rates until inflation is under control. read more

Traders see a near equal chance of a 50 basis point increase and a 75 basis point increase by the Fed in September. FEDWATCH

The S&P 500 benchmark has recovered nearly 17% from its mid-June low, with the latest boost coming from expectations that inflation has peaked after softer-than-expected data earlier this month.

Stronger-than-expected corporate earnings also contributed to a rebound in US equities this quarter, but some investors are pointing to potential risks to earnings that could undermine momentum. read more

Home improvement chain Lowe’s Cos Inc (LOW.N) rose 1.2% after better-than-expected quarterly earnings. read more

The number of declining issues outpaced the avant-garde with a 6.27-to-1 ratio on the NYSE and a 3.91-to-1 ratio on the Nasdaq.

The S&P index recorded two new 52-week highs and 29 new lows, while the Nasdaq recorded 13 new highs and 18 new lows.

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Reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru; Editing by Shounak Dasgupta

Our Standards: The Thomson Reuters Trust Principles.

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