Wall Street falls as targets and growth stocks sink

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Wall Street fell on Wednesday, targeting a quarter of the stock market’s value and highlighting concerns about the US economy after retailers became the latest victims of rising prices.

Target Corp’s first-quarter profits have been halved, and the company has warned that higher fuel costs and fares will increase profit margins. Its share fell by more than 25%, tracking the worst day since the Black Monday crash on October 19, 1987.

Retailer results will be the day after rival Walmart Inc adjusts its profit forecasts. SPDR S & P Retail ETFs were down 8.8%.

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“What people are worried about after seeing Target is that they need to withdraw more revenue (estimates),” said Thomas Hayes, chairman of Great Hill Capital in New York. “Consumer sentiment is at its lowest level in years and is sitting down with inflation, so people are looking for signs of inflation easing, but Target gave them nothing today.”

Interest rate-sensitive megacap growth stocks have joined the recent decline, pulling down the S & P 500 and NASDAQ. Tesla Inc lost 7.5%, both Nvidia and Amazon fell more than 6%, and Apple and Microsoft each fell more than 4%.

Liz Young, Head of Investment Strategy at SoFi, said: “The market is afraid of the next six months. It doesn’t have to be this scary and you may find that the market tends to overreact on the downside.”

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All 11 S & P 500 sector indexes fell, with consumer discretion and consumer staple foods down 6.8% and 6.0%, respectively.

Recently, rising inflation, conflicts in Ukraine, prolonged supply chain roars, pandemic-related blockades in China, and central bank monetary tightening have squeezed financial markets and raised concerns about a global economic slowdown. increase.

The Wells Fargo Investment Institute said Wednesday that it expects a mild recession in the United States from the end of 2022 to the beginning of 2023.

Federal Reserve Chair Jerome Powell vowed on Tuesday to raise interest rates as high as necessary to kill the surge in inflation that the US central bank said was threatening the economic foundation.

Traders are pricing the Fed to raise rates by 50 basis points in June and July.

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In the afternoon trading, the S & P 500 fell 3.79% to 3,933.73 points.

The Nasdaq fell 4.50% to 11,445.19 points and the Dow Jones Industrial Average fell 3.34% to 31,565.46 points.

The S & P 500 has fallen by about 17% so far in 2022, and Nasdaq has fallen by about 27% in the wake of a plunge in growth stocks.

According to Refinitiv data, the recent sale of Wall Street has increased trading on the S & P 500 to about 17 times the expected return. This is the lowest PE rating since the sale in 2020 caused by a coronavirus pandemic.

The CBOE Volatility Index, also known as the Wall Street Fear Gauge, rose to 30.5 points after falling in six consecutive sessions.

The diminishing problem outperforms the ongoing problem on the New York Stock Exchange by a ratio of 5.84: 1. At Nasdaq, a 3.67 to 1 ratio favored the fallen.

The S & P 500 recorded a 52-week high and a 35 low. The Nasdaq Composite recorded 25 new highs and 189 new lows.

(Report by Amruta Khandekar and Devik Jain in Bangalore, Noel Randewich in Oakland, CA, edited by Shounak Dasgupta and Lisa Shumaker)