Target Drops After Reporting Almost 90% Plunge in Profits

S&P 500's gains for the week wiped out
By Newser Editors and Wire Services
Posted Aug 17, 2022 3:37 PM CDT
S&P 500's Gains for the Week Wiped Out
Pedestrians walk past the New York Stock Exchange, on July 8, 2022.   (AP Photo/John Minchillo, file)

Stocks closed lower on Wall Street Wednesday, led by drops in big technology companies and erasing the S&P 500's gains for the week. The S&P 500 fell 31.16 points, or 0.7%, to 4.274.14. The Dow Jones Industrial Average fell 171.69 points, or 0.5%, to 33,980.32, and the Nasdaq fell 164.43 points, or 1.3% to 12,938.12. Small-company stocks fell more than the rest of the market. The Russell 2000 index of smaller companies fell 33.22 points, or 1.6%, to 1,987.31. Wall Street was absorbing a mix of retail updates that showed inflation pressure continues to affect businesses and consumers, but spending remains strong, the AP reports.

Target fell 2.7% after reporting a nearly 90% plunge in second quarter profits as it was forced to slash prices to clear unwanted inventories. The retailer warned earlier this summer that it was canceling orders from suppliers and aggressively cutting prices because of a pronounced spending shift by Americans as the pandemic eased. Children’s clothing and accessories chain Children's Place fell 11% after reporting a surprise second-quarter loss as it faced supply chain problems and pressure from inflation.

Sales at US retailers were unchanged last month, according to the Commerce Department. Economists had expected a slight increase in July. Part of the weakness came from a 1.8% drop in gas sales, reflecting lower prices at the pump. Wall Street has been closely reviewing the latest economic data and corporate updates to get a better sense of how inflation is affecting businesses and consumers and whether the hottest inflation in 40 years is peaking or beginning to cool. Britain’s inflation rate rose to a new 40-year high of 10.1% in July, a faster pace than in the US and Europe as climbing food prices tightened a cost-of-living squeeze fueled by the soaring cost of energy. (More stock market stories.)

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