U.S. Stocks Turn Lower, July Retail Sales Flat

Barry Adams
17 Aug, 2022
New York City

Stocks lacked direction in early trading after advancing for five days in a row and investors focused on the latest batch of retail earnings. 

The Federal Reserve is set to release the latest minutes of meetings as investors look for insights and clues for the size of next rate hikes.   

Total mortgage applications volume declined 2% in the last week from the previous week, according to the Mortgage Bankers Association. 

Mortgage applications declined 1% from the previous week and dropped 18% from a year ago as more buyers walk away from home contracts or drop out of the housing market. 

Mortgage applications are running at a 22-year low. 

The average contract interest for 30-year fixed-rate mortgages declined to 5.45% from 5.47% in the previous week but higher than 3.0% from a year ago. 

The loan origination fee fell to 0.57 points from 0.80 points a year ago for loans with 20% down payment. 

Retail sales adjusted for seasonal factors but not for price variations were flat in July compared to June but increased 10.3% from a year ago, the Census Bureau reported Wednesday. 

Futures of crude oil edged up $1.42 to $87.97 a barrel and natural gas decreased 9 cents to $9.13 a thermal unit.  

The S&P 500 index fell 0.8% to 4,269.91 and the Nasdaq Composite index declined 1.5% to 12,908.96. 

The yield on 10-year Treasury notes increased to 2.88% and 3-year yield notes advanced to 3.32%. 

Target Corporation declined 3.3% to $174,14 after the retailer reported a sharp decline in earnings after the company marked down items to clear excess inventories. 

Second quarter revenues increased 3.5% to $26.0 billion from $25.2 billion a year ago. 

Net income in the quarter plunged to $183 million from $1.82 billion a year ago. Diluted earnings per share dropped to 39 cents from $3.65 a year ago. 

Target reiterated its prior guidance for full-year revenue growth in the low- to mid-single digit range, and an operating margin rate in a range around 6% in the second-half of the year.

Lowe's Companies increased 1.6% to $217.45 after the home improvement retailer said second quarter revenues decreased to $27.5 billion from $27.6 billion a year ago. 

Second quarter net income was flat at $3 billion and diluted earning per share increased to $4.68 from $4.27 a year ago.