The nervousness of the rate hike weighs on Wall Street; supply chain eclipses retail
- Target raises outlook, but stock falls on third quarter margin hit
- Electric Vehicle Manufacturers’ Shares Rise Amid Growing Demand
- Visas after Amazon balks at paying high fees in UK
- Falling indices: Dow 0.45%, S&P 0.14%, Nasdaq 0.15%
NEW YORK, Nov. 17 (Reuters) – Wall Street indices fell on Wednesday as investors bet on anticipated Federal Reserve rate hikes after strong retail earnings, though supply chain concerns have grown. lowers retail inventory.
Target Corp (TGT.N) was the last major retailer to report positive results as it raised its annual forecast and exceeded earnings expectations, citing an early start to holiday shopping.
But the company’s shares fell 4.7%, following declines by its counterpart Walmart (WMT.N) on Tuesday, as both retailers reported a hit to their third-quarter margins due to problems with Supply Chain. Read more
Other retailers that have yet to report profits posted a decline. Macy’s Inc (MN) and Kohls Corp (KSS.N) both lost nearly 5%, before releasing figures Thursday morning. Gap Inc (GPS.N) and Urban Outfitters Inc (URBN.O), on bridge next week, slipped 4.4% and 3.6%.
Some retailers have resisted the trend. TJX Companies Inc (TJX.N) was up 7.5% after hitting an all-time high earlier in the session. The owner of TJ Maxx announced earnings exceeding estimates, an increase in his share buyback program and expected that he was well positioned to meet holiday demand. Read more
Lowe’s Cos Inc (LOW.N) rose 1.6% after the home improvement chain raised its full-year sales forecast due to increased demand from builders and contractors, as well as a strong US real estate market. Peer Home Depot (HD.N) also posted strong results on Tuesday. Read more
The Dow Jones was also weighed down by Visa Inc (VN), which fell 6.3% after Amazon.com Inc (AMZN.O) said it would stop accepting operator-issued cards. in the UK due to the high fees charged for transactions. Read more
Nasdaq (.IXIC) losses were tempered by major tech stocks, which tend to gain in times of high market uncertainty.
While strong retail data this week showed that a rise in inflation has so far failed to stifle economic growth, investors worried that further price increases could hurt growth and push the economy forward. Federal Reserve to tighten policy sooner than expected.
“The fear of inflation is still there and these keep creeping in and the discussions we have about – is it transient, is it supply related – it’s still in the market”, said Joe Saluzzi, co-director of trading at Themis Trading in Chatham, New Jersey.
“The Fed will hold up as long as it can… But if (inflation) continues to rise and you continue to see inflationary pressures, then the question is how much and how often (rates) will increase. “
The contrasting comments from Fed chairmen James Bullard and Mary Daly on Tuesday also created more uncertainty in the markets.
Strong retail earnings this week will end a season of bullish third-quarter earnings that pushed Wall Street indices to record highs.
Investors were awaiting third quarter results from Nvidia Corp (NVDA.O), expected after the bell. Shares of the chipmaker fell 2% but was trading just below record highs.
The Philadelphia Semiconductor Index (.SOX), down 0.5%, also hovered below all-time highs.
At 1:47 p.m. ET, the Dow Jones Industrial Average (.DJI) was down 162.68 points, or 0.45%, to 35,979.54, the S&P 500 (.SPX) was down 6.75 points, or 0 , 14%, to 4,694.15 and the Nasdaq Composite (. IXIC) lost 23.54 points, or 0.15%, to 15,950.32.
Tesla (TSLA.O) rose 3%, while its counterpart Canoo (GOEV.O) added 1.8% amid rising demand for electric vehicle shares on Wall Street. Read more
But Rivian Automotive Inc (RIVN.O) fell 16.7% as investors posted gains after a streak of nearly 71% in a row since the stock was listed last week.
Reporting by Ambar Warrick and Devik Jain in Bengaluru and David French in New York; Editing by Maju Samuel and Lisa Shumaker
Our Standards: The Thomson Reuters Trust Principles.