Wall Street ended significantly lower on Wednesday, with Target losing about a quarter of its stock market value and underscoring concerns about the US economy after retailers became the latest victim of price increases.
It was the worst one-day loss of the S&P 500 and the Dow Jones industrial average since June 2020.
Target Corp’s first-quarter profit fell by half and the company warned of higher margins due to rising fuel and freight costs.
Its shares fell by 25% and lost about 25 billion US dollars in market value, in the worst session since the black Monday collapse on October 19, 1987.
The dealer’s results come a day after rival Walmart Inc cut its earnings forecast.
SPDR S&P Retail ETF decreased by 8.3%.
“We believe that the development impact on retail spending, where inflation is exceeding wages even longer than people might expect, is a major factor in driving sales today,” said Paul Christopher, head of international marketing at the Wells Fargo Investment Institute.
“Retailers have begun to demonstrate the impact of reducing consumer purchasing power.
Interest rate-sensitive high-yield equities added to recent declines, lowering the S&P 500 and Nasdaq. Amazon, Nvidia and Tesla Inc fell by almost 7% while Apple fell by 5.6%.
“The shortcomings outweigh the benefits of growth stocks at this particular moment, and the market is trying to decide how bad it will be,” said Liz Young, SoFi’s chief investment officer.
“The market fears for the next six months. We may find that it does not have to be as scary as this and markets tend to react too much to the downside. “
All 11 S&P 500 sector indices decreased, as consumer goods and consumer product indices led lower, both falling by more than 6%.
Rising inflation, the conflict in Ukraine, prolonged grumbling in the supply chain, epidemic-related closures in China and the tightening of central bank monetary policy have recently weighed on financial markets and raised concerns about a global economic downturn.
The Wells Fargo Investment Institute said on Wednesday that it expects a slight contraction in the United States at the end of 2022 and early 2023.
Governor Jerome Powell promised on Tuesday that the US Federal Reserve would raise interest rates as high as necessary to kill inflationary pressures, which he said threatened the economy.
Traders are pricing 50-point interest rate hikes at the Fed in June and July.
Unofficially, the S&P 500 fell 4.04% and ended the cycle at 3,923.68 points.
The Nasdaq was down 4.73% to 11,418.15 points, while the Dow Jones industrial average was down 3.57% to 31,490.07 points.
The S&P 500 has fallen by 18% so far in 2022 and the Nasdaq has fallen by 27% due to falling stocks.
Nearly two-thirds of S&P 500 shares are down 20% or more from the 52-week high, according to Refinitiv data.
Recent sales on Wall Street have yielded S&P 500 trades at approximately 17 times the estimated profit, its lowest PE valuation since 2020 due to the coronary heart disease epidemic, according to Refinitiv data.
The CBOE Volatility Index, also known as the Wall Street Scarecrow, rose 31 points after falling six rounds in a row.
The volume of US stock exchanges was 12.5 billion shares, compared to the average of 13.4 billion in the last 20 trading days.
Falling stocks outperformed rising NYSE at 5.09 versus 1 ratio; on the Nasdaq, 3.52 versus 1 percentage supported the declines.
The S&P 500 announced one new 52-week high and 37 new highs; The Nasdaq Composite recorded 25 new highs and 242 new lows.
Wall Street ends lower as equities’ targets and growth fall – SABC News
Source link Wall Street ends lower as equities’ targets and growth fall – SABC News