Home Business S&P 500 drops after Target outlook, Micron supply cut

S&P 500 drops after Target outlook, Micron supply cut

8 min read
Comments Off on S&P 500 drops after Target outlook, Micron supply cut
0
19


Article content

The S&P 500 fell on Wednesday as a grim outlook from Target spurred fresh concerns about retailers heading into the crucial holiday season, while semiconductor shares slumped broadly after Micron’s supply cut.

Shares of Target Corp tumbled after the big-box retailer forecast a surprise drop in holiday-quarter sales.

Article content

Retail stocks slumped broadly, including steep declines in shares of Macy’s Inc, Best Buy Co Inc and Foot Locker.

Micron Technology shares dropped after the company said it would reduce memory chip supply and make more cuts to its capital spending plan. The S&P 500 information technology sector and the Philadelphia SE Semiconductor index both sank.

Advertisement 2

Article content

“The biggest sector issue is Target’s earnings and what that means for retail and consumer spending in general. I think that has kind of set the tone for the market,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.

The Micron news “is certainly causing some tech investors to take some of these short term profits off the table because it still appears like the fundamentals are still not great in the tech space,” Carlson said. According to preliminary data, the S&P 500 lost 32.55 points, or 0.80%, to end at 3,959.18 points, while the Nasdaq Composite lost 172.80 points, or 1.52%, to 11,185.61. The Dow Jones Industrial Average fell 31.14 points, or 0.09%, to 33,561.78.

Advertisement 3

Article content

Gains in defensive areas such as utilities and consumer staples helped mitigate the S&P 500’s losses.

Despite the sales warning from Target, data showed U.S. retail sales increased more than expected in October as households stepped up purchases of motor vehicles, suggesting consumer spending picked up early in the fourth quarter.

Elsewhere in retail, shares of Lowe’s rose after the home improvement company raised its annual profit forecast.

Stocks had staged a big rally over the past month, after softer-than-expected inflation data raised hopes the Federal Reserve could get less aggressive with interest rate hikes.

“The market had seen a good run-up from those lows and had continued to move higher,” said George Catrambone, head of Americas trading at DWS Group. “The market has a lot to think about and digest as we get into year end.”

Advertisement 4

Article content

U.S. Federal Reserve Governor Christopher Waller, an early and outspoken “hawk” in the central bank’s efforts to confront inflation, said he is now “more comfortable” with smaller rate increases going forward after recent data showed the pace of price increases slowing.

Investors also had their eyes on geopolitical tensions. A missile that hit Poland was probably a stray fired by Ukraine’s air defenses and not a Russian strike, Poland and NATO said, easing global concern that the war in Ukraine could spill across the border. (Reporting by Lewis Krauskopf in New York, Bansari Mayur Kamdar, Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Shounak Dasgupta, Arun Koyyur and David Gregorio)

Advertisement

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.



Source link

Load More Related Articles
Load More By 
Load More In Business
Comments are closed.

Check Also

Buying a Wii U in 2023

There were few reasons to own a Wii U back when I bought my original unit in 2013 and even…