Wall St falls as growth stocks slide, Target weighs on retail stocks

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 15, 2022. REUTERS/Brendan McDermid

Aug 17 (Reuters) – Major Wall Street indexes fell on Wednesday, with growth stocks coming under renewed pressure as bond yields climbed ahead of the Federal Reserve’s July meeting minutes, while weak results from Target dragged the retail sector down.

Retail revenue has been mixed so far this week, with Target Corp (TGT.N) fell 2% after announcing a 90% decline in quarterly profits as its inflation-hit clients limited their spending on discretionary goods. Read more

The retail sector of the S&P 500 (.SPXRT) fell 1.2%, after jumping 1.9% in the previous session on the back of encouraging quarterly results from Walmart Inc. (WMT.N) and Home Depot Inc. (HD.N).

Data showed U.S. retail sales were unchanged in July as lower gasoline prices weighed on gas station revenues. However, consumer spending appeared to be holding up, which may further ease fears that the economy is already in recession. Read more

“We need to see a real decline in inflation,” said Brian Overby, senior market strategist at Ally. “The retail market space, since the release of results this week, does not confirm the fact that inflation has peaked.”

High growth and technology stocks such as Amazon.com Inc (AMZN.O) and Nvidia Corp. (NVDA.O) fell nearly 2% each as US Treasury yields rose for the second straight session.

Nine of the 11 major sectors of the S&P 500 fell in early trading, with communication services (.SPLRCL) and consumer discretionary (.SPLRCD) shares resulting in losses.

At 9:51 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 194.64 points, or 0.57%, at 33,957.37, the S&P 500 (.SPX) was down 34.07 points, or 0.79%, at 4,271.13, and the Nasdaq Composite (.IXIC) was down 152.85 points, or 1.17%, at 12,949.70.

The focus was on the release of minutes from the July meeting of the US Federal Reserve which could give clues to the extent of further interest rate hikes after policymakers were adamant on the fact that they will continue to raise rates until inflation is brought under control. Read more

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

The benchmark S&P 500 index has recovered nearly 17% from its mid-June lows, with the latest boost coming from expectations that inflation has peaked after weaker-than-expected data at the start of the month.

Stronger-than-expected corporate earnings also helped fuel a rebound in US equities this quarter, but some investors are signaling potential risks ahead to earnings that could undermine momentum. Read more

Home improvement chain Lowe’s Cos Inc (LOW.N) rose 1.2% after posting a better-than-expected quarterly profit. Read more

Falling issues outnumbered advances for a 6.27-to-1 ratio on the NYSE and a 3.91-to-1 ratio on the Nasdaq.

The S&P index recorded two new 52-week highs and 29 new lows, while the Nasdaq recorded 13 new highs and 18 new lows.

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

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