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Tags: financial markets | retailers | target | walmart | commerce department

Sharp Drop in Retailers Pulls Wall St Indexes Lower

Target
(AP)

Wednesday, 18 May 2022 09:57 AM EDT

Stocks are opening lower on Wall Street, led by steep drops in retailers as Target plunged after issuing a grim quarterly earnings report. Target lost a quarter of its value in the early going Wednesday after saying its results were hit by higher costs, dragging other store operators down with it.

Dollar Tree, Dollar General and Best Buy all lost more than 10%.

The S&P 500 gave back 1.6%, while drops in tech companies helped pull the Nasdaq down 1.9%. The Dow Jones Industrial Average fell 1.2%. The yield on the 10-year Treasury held steady at 2.97%.

On Tuesday, Markets rebounded after the Commerce Department report that showed retail sales rose 0.9% in April. Home Depot also reported strong results, but Walmart said its profit took hit from higher costs. Target said much the same Wednesday, reporting that its first-quarter net income was roughly half that from a year ago, sending shares tumbling more than 23% in premarket trading.

Fed Chair Jerome Powell told a Wall Street Journal conference that the U.S. central bank will “have to consider moving more aggressively” if inflation that is running at a four-decade high fails to ease after earlier rate hikes.

Expectations of rate hikes “ticked higher” due to Powell’s comments, but “markets are shrugging it off and are in need of a breather” after a selloff, Yeap Jun Rong of IG said in a report.

Shares in Europe fell in midday trading following a mixed day in Asia. The FTSE 100 in London, the DAX in Frankfurt and Paris's CAC 40 were all down about 0.3%.

In Asia, the Shanghai Composite Index lost 0.3% to 3,085.96 while the Hang Seng in Hong Kong rose 0.2% to 20,644.28 after spending most of the day in negative territory.

The Nikkei 225 in Tokyo gained 0.9% to 26,911.20 after the government reported economic output shrank 0.2% in the first three months of 2022. That was stronger than expectations.

The Kospi in Seoul gained 0.2% to 2,625.98 and Sydney's S&P-ASX 200 advanced 1% to 7,182.70.

India's Sensex was off less than 0.1% at 54,281.05. Bangkok declined while New Zealand and other Southeast Asian markets rose.

Consumers are providing critical support to the U.S. economy despite higher costs for gas, food and rent. The economy contracted in the first three months of the year, but consumer and business spending still increased at a healthy pace.

The Fed and other central banks are raising interest rates that have been near zero during the coronavirus pandemic or say they plan to in order to cool inflation. Supply chain problems have prompted businesses to raise prices on everything from food to clothing as demand rebounds after the pandemic.

Oil and gas prices have been pushed up by Russia's war on Ukraine, which fueled fears Russian supplies might be disrupted.

In energy markets, benchmark U.S. crude rose $2.19 to $114.59 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.80 on Tuesday to $112.40. Brent crude, the price basis for international oil trading, added $1.62 to $113.55 per barrel in London. It lost $2.31 the previous session to $111.93.

The dollar declined to 129.12 yen from Tuesday's 129.42 yen. The euro sank to $1.0510 from $1.0543.

© Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


StreetTalk
Stocks are opening lower on Wall Street, led by steep drops in retailers as Target plunged after issuing a grim quarterly earnings report. Target lost a quarter of its value in the early going Wednesday after saying its results were hit by higher costs.
financial markets, retailers, target, walmart, commerce department
539
2022-57-18
Wednesday, 18 May 2022 09:57 AM
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