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Wall Street sales are gaining momentum, with the Dow falling more than 700 points

U.S. equities fell on Wednesday after another big trader warned of rising cost pressures, confirming fears about inflation that have so far sent big references to big losses.

The Dow Jones Industrial Average fell 720 points, or 2.2%, from its first four-day average loss. The S&P 500 traded lower by 2.5%, while the Nasdaq Composite fell 2.6%.

These losses come after a disappointing profit report from Target. Shares fell more than 24% on Wednesday as Target was much lower than Wall Street estimated in the first quarter due to higher fuel and compensation costs. The retailer also saw lower sales than discretionary sales such as television.

Target’s report after Walmart released earnings that fell short of expectations on Tuesday, citing higher fuel and labor costs. Walmart shares ended 11% lower on Tuesday. They fell another 6% on Wednesday.

“Consumers are challenged,” said Megan Horneman, chief investment officer at Verdence Capital Advisors. “We started to see at the end of the year that consumers were turning to credit cards to pay for rising food prices, rising energy prices, and that was actually much worse … This is going to hurt those retail outlets. And Walmart is often one of them. “.

Other traders were successful on the back of Target’s quarterly earnings. Best Buy’s share price fell more than 8%, Dollar General’s more than 11% and Dollar Tree’s more than 17%. Shares of Macy’s fell 9%, while shares of Kohl’s fell more than 10%.

Lowe’s shares fell more than 4% in its first quarter report after losing sales expectations as buyers bought fewer supplies for external projects.

“Any home-based and discretionary purchasing company is likely to suffer this quarter because a lot of discretionary revenue has been channeled into food and energy prices,” said Jack Ablin, a founding partner at Cresset Capital.

Meanwhile, TJ Maxx, the parent company of TJ Maxx, was a retailer, with shares rising 8% after the big chain saw earnings rise.

Wednesday’s stock market reversal came after a year-long low return on equities. On Tuesday, the Dow rose 431 points, or 1.3%, while the S&P 500 gained 2% and the Nasdaq Composite rose nearly 2.8%.

The Dow fell seven weeks in a row, but stocks stabilized in the previous three trading sessions. Last week, the S&P 500 fell to the edge of the bear market – or below 20% – but the index has recovered slightly since then.

Despite the recent return, the S&P 500 fell 16% year-on-year and the Nasdaq Composite fell 25%.

Gas prices have risen steadily, contributing to inflationary pressures seen throughout the economy. According to the AAA, the national average of one liter of regular gasoline was set at $ 4.567 on Wednesday. Prices are 48 cents higher than a month ago, and $ 1.52 higher than what consumers paid last year.

Each state is averaging more than $ 4 per liter, and some states pay much more. In California, the statewide average has exceeded $ 6.

The benchmark 10-year Treasury bill yield rose to 3% on Wednesday morning as investors valued the possibility of a tighter monetary policy.

Stocks and other risky assets have been under pressure from the Federal Reserve and its attempts to reduce price increases through rate hikes, which has raised concerns about a potential recession. Fed Chairman Jerome Powell told a Wall Street Journal conference on Tuesday that “there will be no hesitation” in raising rates until inflation is controlled.

– CNBC’s Pippa Stevens contributed to this report.

Wall Street sales are gaining momentum, with the Dow falling more than 700 points

Source link Wall Street sales are gaining momentum, with the Dow falling more than 700 points

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