The S&P 500 fell on Wednesday as investors weighed on a bleak quarterly update from Target that weighed on retail stocks.
The broad market index last fell 0.8% and the Nasdaq Composite fell 1.4%, while the Dow Jones Industrial Average grappled with the flatline.
The moves came after Target reported a decline in sales as families deal with soaring inflation heading into the biggest shopping season of the year for retailers. the effect of the warning on stocks, Send the target down by more than 15% It is on its worst day since May. Advanced auto parts target decreased by double digits. Macy’s, Kohl’s, Nordstrom, and Gap also fell significantly.
“The volatile retail earnings season is forcing investors to be selective, especially with their retail exposure as the gap between large retail and specialty retail continues to widen,” said the founder and CEO of KKM Financial.
Wall Street exited a positive session, with the S&P 500 closing 0.87% higher on Tuesday and the Dow Jones adding 56.22 points, or 0.17%. The Nasdaq jumped 1.45% and is the only major average on pace for a slight gain for the week. The producer price index, which measures wholesale prices, came in below expectations, easing some investor concerns about inflation.
Stocks saw a strong rally in the wake of last week’s better-than-fright CPI report. Last week, the S&P 500 posted its best weekly extension since June and all major averages are on track to end the month with gains.
However, some investors say a near-term downturn looms.
“In the short term, the market is too stretched and overdue to turn back and digest the recent rally,” said Adam Sarhan, CEO of 50Park Investments.
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