Sharp Drop in Retail Helps Lower Wall Street Indices: WSVN 7News | Miami News, Weather, Sports

NEW YORK (AP) — Stocks fell sharply in afternoon trading on Wall Street Wednesday, fueled by sharp declines at retailers as Target slumped after posting a dismal quarterly earnings report.

The S&P 500 was down 2.9% at 12:03 pm ET. The Dow Jones Industrial Average fell 804 points, or 3.4%, to 31,850 and the Nasdaq fell 3.4%.

Target lost a quarter of its value after reporting profit that fell well short of analyst forecasts while citing higher costs. The report comes a day after Walmart said its profits were hit by higher costs. The country’s largest retailer fell 6.6%, adding to its losses on Tuesday.

The weak reports stoked concerns that persistently rising inflation is putting tighter pressure on a wide range of companies and could further dent their profits.

Retailers had some of the biggest losses. Dollar Tree fell 16.8% and Dollar General plunged 11.3%. Best Buy fell 9.3% and Amazon fell 5.5%. Technology stocks also fell sharply. Apple lost 4.2%.

Housewares makers and grocery stores also fell sharply. Kroger fell 5.6% and Procter & Gamble fell 4.4%.

Bond yields fell. The 10-year Treasury yield fell to 2.92% from 2.97% on Tuesday night. Utilities held up better than the rest of the market as investors moved money into investments seen as less risky.

Target’s disappointing report comes a day after the market cheered an encouraging report from the Commerce Department that showed retail sales rose in April, driven by higher car sales, electronics and more restaurant spending.

Stocks have been struggling to climb out of a slump for the past six weeks as investor concerns mount. Trading has been choppy every day and investors are closely monitoring any data from retailers and consumers as they try to determine the impact of inflation and whether it will cause a slowdown in spending. A larger-than-expected impact on spending could signal slower economic growth going forward.

The Federal Reserve is trying to blunt the impact of the highest inflation in four decades by raising interest rates. On Tuesday, Fed Chairman Jerome Powell told a Wall Street Journal conference that the US central bank “will have to consider moving more aggressively” if inflation doesn’t slow after price hikes. earlier types.

Investors worry that the central bank could cause a recession if it raises rates too high or too fast. Global growth concerns persist as Russia’s invasion of Ukraine puts further pressure on oil and food prices, while lockdowns in China to curb COVID-19 cases worsen supply chain problems .

The United Nations is significantly lowering its forecast for world economic growth this year from 4% to 3.1%. The downgrade is broad-based, including the world’s largest economies such as the US, China and the European Union.

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