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US Stocks Open Lower on Disappointing Retailer Earnings

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Wall Street stocks retreated early Wednesday as markets digested warnings from a major retailer about a weak holiday shopping season, although US retail sales data suggested some resilience among consumers. online news

The broad-based S&P 500 fell 0.6 percent to 3,968.96 in early trading, while the tech-rich Nasdaq Composite Index dropped 1.1 percent to 11,192.76.

However, the Dow Jones Industrial Average recouped early losses and was up 0.1 percent to 33,617.08

The movements came after big-box retailer Target reported weaker-than-expected profits in its fiscal third quarter, citing an “increasingly challenging environment.”

As households grapple with stubbornly high inflation, US retailers have had to contend with a gloomier profit environment and ebbing demand, as well as consumers on the hunt for bargains.

Target warned that softening sales and profit trends persisted into November, adding it would be “prudent” to plan for outcomes centering around a low-single digit decline in comparable sales.

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But Target competitor Walmart was more upbeat, and raised its full-year outlook on Tuesday, though that was in large part due to growing demand for low-cost groceries.

US retail sales data, also released before the markets opened, pointed to some resilience in spending in the face of price pressures.

Sales rose more than expected, increasing 1.3 percent in October, boosted by autos but also by high gas prices, amid a slight decline in discretionary segments such as electronics and appliance stores, according to the Commerce Department report.

In other data, industrial output slowed in October and September’s result was revised lower, due to tepid manufacturing gains and slowing oil production.

Target shares fell 13.7 percent in early trading, while Walmart was up 0.7 percent.

Wall Street also is cautious following reports of a missile strike in Poland on Tuesday, tempered by statements that it likely was fired by Ukraine in the face of a Russian barrage.

“It remains to be seen if there will be a stronger response in the stock market as the day progresses,” said Patrick O’Hare of Briefing.com in an analysis.


© Agence France-Presse. All rights are reserved.

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