Target Drops 8% After Disappointing Profit Report

Inflation, interest fears drag indexes down from record highs
By Newser Editors and Wire Services
Posted May 22, 2024 3:43 PM CDT
Inflation Fears Drag Stocks Down From Record Highs
American flags fly on the front of the New York Stock Exchange.   (AP Photo/Peter Morgan)

US stock indexes pulled back from their records Wednesday as concerns about inflation and high interest rates weighed on the market.

  • The S&P 500 fell 14.40 points, or 0.3%, to 5,307.01. The index hit a record high on Tuesday.
  • The Dow Jones Industrial Average fell 201.95 points, or 0.5%, to 39,671.04.
  • The Nasdaq composite, which also set a record on Tuesday, fell 31.08 points, or 0.2%, to 16,801.54.
Indexes had been close to flat early in the day, but they sank after minutes from the Federal Reserve's latest meeting showed officials suggesting it would likely take longer than previously thought to get inflation fully under control, the AP reports. Even though Fed Chair Jerome Powell said after that meeting that the Federal Reserve is more likely to cut rates than to hike them, the minutes said "various participants" were willing to raise rates if inflation worsens.

One of the market's worst losses came from Target, which tumbled 8% after the retailer reported profit for the latest quarter that fell short of analysts' expectations. It also gave forecasted ranges for upcoming profit that fell below analysts' estimates, as it said customers are holding back on purchases of non-essentials. Earlier this week, Target said it was cutting prices on thousands of everyday basics to entice customers struggling with still-high inflation. Lululemon Athletica sank 7.2% after it said its chief product officer, Sun Choe, is leaving the company this month to "pursue another opportunity."

On the winning side, Petco Health & Wellness leaped 17.6% after reporting results and revenue for the latest quarter that were better than analysts feared. TJX, the off-price retailer of apparel and home goods, rose 3.5% after topping profit expectations. The company behind TJ Maxx and Marshalls also raised its forecast for earnings per share over the full year, saying its prices are helping to attract customers. (More stock market stories.)

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