Wall St drops as growth stocks slide, Target weighs on retail shares

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 as growth stocks came under pressure after bond yields rose 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) down 3.3% after announcing a 90% drop 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 1.7%, 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 could further ease fears that the economy is in recession. Read more

High growth and technology stocks such as Amazon.com Inc (AMZN.O) and Nvidia Corp. (NVDA.O) fell more than 2.5% each as US Treasury yields rose for the second consecutive session.

Investors predict that the Fed minutes will likely reaffirm the central bank’s focus on raising rates until inflation is brought under control. Read more

“We still have a long way to go to move from an inflation print of 8% to somewhere where rates are normalized,” said Charlie Ryan, portfolio manager at Evercore Wealth Management.

“The biggest risk is what do we do if we get a bad inflation picture this month without the Fed meeting.”

Most major S&P 500 sectors were trading in the red at midday, while energy stocks (.SPNY) slightly increased the follow-up gains in crude prices.

The S&P 500 has recovered nearly 17% from its mid-June lows, the latest boost coming from hopes that inflation has peaked after weaker-than-expected data earlier in the month.

The benchmark also came close to breaking above its 200-day moving average on Tuesday, a key technical level it has not exceeded since early April.

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

At 12:03 p.m. ET, the Dow Jones Industrial Average (.DJI) was down 273.08 points, or 0.80%, at 33,878.93, the S&P 500 (.SPX) was down 45.89 points, or 1.07%, at 4,259.31, and the Nasdaq Composite (.IXIC) was down 217.65 points, or 1.66%, at 12,884.90.

Upbeat corporate earnings also helped fuel a rebound in U.S. 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 0.8% after posting a better-than-expected quarterly profit. Read more

Falling issues outnumbered advances for a 6.06-to-1 ratio on the NYSE and a 3.96-to-1 ratio on the Nasdaq.

The S&P index recorded three new 52-week highs and 29 new lows, while the Nasdaq recorded 24 new highs and 41 new lows.

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

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