Stocks slipped lower Wednesday as digested a disappointing earnings report from retail bellwether Target
Here's how the market settled on Wednesday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
In the spotlight Wednesday, Target reported a decline in sales during its third quarter as consumers were met with high inflation ahead of the holiday shopping season. The stock plunged more than 13% with the company posting its worst day since May.
"In the latter weeks of the quarter, sales and profit trends softened meaningfully, with guests' shopping behavior increasingly impacted by inflation, raising interest rates and economic uncertainty," CEO Brian Cornell said in the company's earnings release. "This resulted in a third-quarter profit performance well below our expectations."
Despite the rough quarter, analysts at UBS believe Target is actively working to address its near-term challenges, which could drive growth in the near future.
"Overall, we think TGT's 3Q results suggest it's still working through some NT challenges," analyst Michael Lasser wrote in a note to clients Wednesday. "On the positive side, the retailer continued to drive traffic which speaks to its strong customer loyalty & brand awareness. Plus, its inventor position improves sequentially."
Meanwhile, the Commerce Department reported retail sales rose 1.3% in October, topping expectations. Excluding auto sales, retail sale increased by 1.3% and total sales not adjusted for inflation rose 0.4% for the month.
The strong print may impact Wall Street's recent upward trend, as robust consumer spending may signal to the Federal Reserve that more actions need to be taken to stabilize prices.
Elsewhere in economic news, homebuilder sentiment fell to the lowest level in a decade in November, as builders continue to grapple with higher costs for labor and materials amid lowering demand for single-family homes.
The National Association of Home Builders' monthly sentiment index declined 5 points from October to 33, marking the eleventh straight monthly decline and the lowest reading since June 2012, excluding the brief drop at the start of the coronavirus pandemic.
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