Target Corp’s first-quarter profit fell by half and the company warned of a further hit to margins from rising fuel and transportation costs. Its shares lost more than 25% in their worst session since Black Monday on October 19, 1987.
The retailer’s results come a day after rival Walmart Inc. cut its profit forecast.
“We think the impact on retail spending, because inflation has outpaced wages for longer than expected, is the main factor that has caused the market to sell off today,” said Paul Christopher, head of global market strategy. of the Wells Fargo Investment Institute. “Retailers are beginning to reveal the impact of the erosion of consumer purchasing power.”
Interest rate-sensitive mega-cap growth stocks added to their recent declines and dragged down the S&P 500 and the Nasdaq. Tesla Inc, Nvidia, Amazon, Apple and Microsoft all fell sharply.
All 11 sector indices of the S&P 500 fell, starting with consumer discretionary and consumer staples.
Rising inflation, the war in Ukraine, prolonged supply chain disruptions, pandemic-related lockdowns in China and monetary policy tightening by central banks have recently weighed on financial markets, fueling concerns about an economic slowdown.
According to preliminary data, the S&P 500 lost 163.59 points, or 4.00%, to 3,925.18 points, while the Nasdaq fell 561.50 points, or 4.69%, to 11,423.03. The Dow Jones Industrial Average fell 1,148.11 points, or 3.52%, to 31,506.48.
The S&P 500 has lost 17% so far this year and the Nasdaq has fallen 27%, hurt by lower growth stocks.
Source: Ambito
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