Stocks fall sharply as Target's woes renew inflation fears

NEW YORK -- The Dow Jones Industrial Average sank more than 1,100 points and the S&P 500 had its biggest drop in nearly two years Wednesday, as big earnings misses by Target and other major retailers stoked investors' fears that surging inflation could cut deeply into corporate profits.

The Dow dropped 3.6%, while the Nasdaq fell 4.7%. The three indexes are on pace to extend a string of at least six weekly losses. Target lost a quarter of its value after reporting earnings that fell far short of analysts' forecasts. In a sign of the impact of inflation, particularly on shipping costs, Target said its operating margin for the first quarter was 5.3%. It had been expecting 8% or higher. The company also said consumers returned to more normal spending habits, switching away from TVs and appliances and buying more toys and travel-related items.

"These retailers are having to balance how much of the higher inflation to pass on to consumers versus eating it, so that goes into questions about profitability on the part of companies and that gets to some of these lingering valuation questions for the market," said Willie Delwiche, investment strategist at All Star Charts.

All told, more than 95% of stocks in the S&P 500 closed lower. Utilities also weighed down the index, though not nearly as much as the other 10 sectors, as investors shifted money to investments that are considered less risky. Stocks have been struggling to pull out of a slump over the last six weeks as concerns pile up for investors. Trading has been choppy on a daily basis and any data on retailers and consumers is being closely monitored by investors as they try to determine the impact from inflation and whether it will prompt a slowdown in spending. A bigger-than-expected hit to spending could signal more sluggish economic growth ahead.

Australia Australia Latest News, Australia Australia Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Stocks fall sharply as Target's woes renew inflation fearsNEW YORK (AP) — The Dow Jones Industrial Average sank more than 1,100 points and the S&P 500 had its biggest drop in nearly two years Wednesday, as big earnings misses by Target and other major retailers stoked investors' fears that surging inflation could cut deeply into corporate profits. I was telling my wife a joke about inflation, but she didn't get it. It really fell flat. If you have to spend all you money on gasoline, other purchases will be cut back. Companies doing deliberately inflation to profit
Source: AP - 🏆 728. / 51 Read more »

Stocks fall sharply as Target's woes renew inflation fearsThe Dow Jones Industrial Average sank more than 1,100 points and the S&P 500 had its biggest drop in nearly two years Wednesday. Thank Mr 🤡 Biden for crashing the market.
Source: abc7newsbayarea - 🏆 529. / 51 Read more »

Unlike Walmart and Target, these stocks tend to do well when inflation is highWhen rising costs crimp corporate profits and curb consumer demand, some stocks have a record of performing well during periods of rapid inflation.
Source: CNBC - 🏆 12. / 72 Read more »