Wall Street Indexes Trade Sideways, Target Drops 9% On Earnings Weakness

Barry Adams
22 May, 2024
New York City

U.S. stocks traded slightly lower in early trading as investors digested a fresh batch of earnings from retailers. 

The S&P 500 index and the Nasdaq Composite inched lower after Target Corp. reported weaker-than-expected earnings and said consumers are restricting discretionary items. 

Artificial intelligence technology-driven stocks were also in focus ahead of Nvidia's earnings release after the market close. 

The S&P 500, the Dow, and the Nasdaq Composite reached new record highs last week, and the market rally was driven by positive corporate results and continued expectations of interest rate cuts in the second half. 

However, policymakers in recent weeks have signaled that rate-cut expectations in the near future may be misplaced as inflation is still too high and higher rates may be needed longer than previously anticipated to bring down inflation to 2%. 

Inflation has dropped from a high of 9.5% to below 4%, but prices are still rising faster than 3% despite multiple rate hikes over the last two years. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index was nearly unchanged at 5,323.05, and the Nasdaq Composite edged down 0.02% to 16,835.57. 

The yield on 2-year Treasury notes edged higher to 4.88%, 10-year Treasury notes increased to 4.48%, and 30-year Treasury bonds edged higher to 4.59%.

WTI crude oil decreased $0.57 to $78.09 a barrel, and natural gas prices declined 4 cents to $2.62 a thermal unit.

Gold decreased by $10.31 to $2,411.39 an ounce, and silver fell 39 cents to $31.63. 

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.84.

 

U.S. Stock Movers

Target Corp. declined 8.8% to $142.10 after the retailer reported weaker-than-expected earnings and a decline in sales driven by weakening growth trends in discretionary item sales. 

Urban Outfitters rose 4.2% to $43.0 after the apparel retailer reported better-than-expected sales and earnings in its latest quarter. 

Toll Brothers decreased 0.5% to $129.50 after the luxury home builder's quarterly results surpassed market expectations and the company raised its full-year outlook. 

Nvidia Corp. increased 0.6% to $957.50 ahead of the advanced chipmaker's quarterly results after the close of regular trading sessions. 

Nvidia has jumped 98% in the year so far and soared 205% in the last year of trading. 

Viasat declined 10.4% to $16.82 after the satellite communication service provider reported a loss of 80 cents in its fiscal fourth quarter. 

Analog Devices increased 5.4% to $228.32 after the company reported $1.26 earnings per share and $2.16 billion in revenue in the fiscal second quarter.