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, U.S., August 15, 2022. REUTERS/Brendan McDermid

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  • US retail sales flat in July; core sales increase
  • Retailer Target’s quarterly earnings fall
  • Indexes down: Dow 0.80%, S&P 1.07%, Nasdaq 1.66%

Aug 17 (Reuters) – Wall Street’s main indexes fell on Wednesday as growth stocks came under pressure after bond yields rose minutes ahead of the Federal Reserve’s July meeting, while weak results from Target dragged down retail sales.

Retail earnings have been mixed so far this week, with Target Corp ( TGT.N ) falling 3.3% after reporting a 90% drop in quarterly revenue as inflation-hit shoppers drained spending on discretionary items. read more

The S&P 500 retail sector ( .SPXRT ) fell 1.7%, after jumping 1.9% in the previous session on encouraging quarterly earnings from Walmart Inc ( WMT.N ) and Home Depot Inc ( HD.N ).

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

High-growth and technology stocks such as Inc ( AMZN.O ) and Nvidia Corp ( NVDA.O ) each fell more than 2.5% as yields on U.S. Treasuries rose for a second straight session.

Investors expect the Fed minutes to likely confirm the central bank’s focus on raising interest rates until inflation is under control. read more

“We have a long way to go to come down from an 8% inflation print to a place where interest rates are normalized,” said Charlie Ryan, portfolio manager at Evercore Wealth Management.

“The biggest risk is what do we do if we get bad inflationary pressure this month without the Fed meeting.”

Most of the major S&P 500 sectors were trading in the red mid-day, while energy stocks (.SPNY) posted higher tracking gains in crude oil prices.

The S&P 500 has recovered nearly 17% from mid-June lows, with the latest lift from hopes that inflation has peaked after weaker-than-expected data earlier this month.

The benchmark also came close to breaking above its 200-day moving average on Tuesday, a key technical level it has not closed above since early April.

Traders see an almost equal chance of a 50 basis point and 75 basis point increase from the Fed in September. FEDWATCH

At 12:03 PM ET, the Dow Jones Industrial Average (.DJI) was down 273.08 points, or 0.80%, at 33,878.93, the S&P 500 (.SPX) was down 45.89 points, or 1.07% , to 4.259 and Nas31da. The Composite (.IXIC) was down 217.65 points, or 1.66%, at 12,884.90.

Good corporate earnings have also contributed to a rally for US stocks this quarter, but some investors are pointing to potential risks to profits that could sap momentum. read more

Home improvement chain Lowe’s Cos Inc ( LOW.N ) rose 0.8% after posting better-than-expected quarterly results. read more

Declining issues outnumbered advances by a 6.06-to-1 ratio on the NYSE and a 3.96-to-1 ratio on the Nasdaq.

The S&P index recorded three new 52-week highs and 29 new lows, while the Nasdaq recorded 24 new highs and 41 new lows.

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

Our standards: Thomson Reuters Trust Principles.

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