U.S. stocks fell early Tuesday after a profit warning from Target renewed concerns about the economic outlook.
The S&P 500 sank 0.8%, and the Dow Jones Industrial Average shed nearly 200 points. The tech-heavy Nasdaq slid 1%. Meanwhile, the 10-year U.S. Treasury benchmark held above 3%.
Target was in focus during the morning trade after the retailer said Tuesday that it'saiming to trim down excess inventoryby offering discounts, canceling orders and reevaluating its expenses – an announcement that comes just weeks after the company shocked investors with a dramatic earnings miss that sent shares down 25%.
Target's stock fell roughly 6% at open. The decline also weighed on retail peers amid renewed worries about the toll of inflation and supply chain imbalances on corporate margins. Shares of Walmart and Costco each fell about 2% at the start of trading.
“Overall positioning appears to be skewed only modestly toward defense. Our sense is that the shift toward non-cyclicals and high quality will accelerate as recession odds increase in the months ahead. That said, with many investors apparently trying to time recession, U.S. equity markets are likely to remain prone to big upside and downside rips,” Chris Senyek of Wolfe Research said in a note to clients on Tuesday.
Tech stocks were broadly lower, with shares of Amazon falling more than 3%. In deal news, Kohl’s jumped nearly 9% after the retailer said it was in exclusive negotiations with Franchise Group about a potential takeover.
All three of the major averages finished slightly higher Monday. The Dow finished the day up about 16 points, or less than 0.1%, after jumping more than 300 points earlier in the day. The S&P 500 added 0.3%, and the tech-heavy Nasdaq Composite advanced 0.4%.
The indexes on Monday gave back most of their gains from earlier in the day as the 10-year Treasury yield spiked up to 3% and hit its highest level in nearly a month.
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