US stocks slip as Target stumbles, weighs on retailers

Stocks fell on Wall Street in afternoon trading Wednesday as investors reviewed a dismal financial report from Target and a broader update on the retail sector from the government, the AP reported.
The S&P 500 fell 0.7% as of 2:41 p.m. Eastern, with technology companies, retailers and energy stocks among the biggest weights on the index. The Dow Jones Industrial Average rose 18 points, or 0.1%, to 33,613 and the Nasdaq fell 1.3%.
Retailers weighed heavily on the market. Target slumped 13% after cutting its forecasts for the holiday season following a surprisingly big drop in its third-quarter profits. Auto parts retailer Advance Auto Parts fell 15.5% after reporting weak financial results.
Macy’s, which reports its financial results on Thursday, fell 7.5%.
Big technology companies also fell. Chipmaker Micron Technology dropped 6.5% after announcing some production cuts because of weak demand. Nvidia fell 3.3%.
Smaller company stocks also lost ground, pulling the Russell 2000 index 1.8% lower.
Wall Street has been closely watching the latest economic updates, including reports that consumer and wholesale prices continue to cool. Much of the market’s prior rally was due to hopes inflation is easing, which could portend less aggressive hikes for interest rates from the Federal Reserve.
The Fed has been raising interest rates in an effort to slow the economy and tame the hottest inflation in decades. Wall Street is worried that it could hit the brakes too hard on economic growth and bring on a recession.
The latest government report on retail sales for October shows that consumer spending remains strong, though it’s unclear whether that’s because of more purchases or higher prices.
Strong consumer spending is typically a good sign for the economy, but it could make the Fed’s strategy of cooling the economy more difficult. The central bank has already hiked its key overnight rate up to a range of 3.75% to 4% from virtually zero earlier this year. It has said it still plans to hike rates further and then to hold them at that high rate for a while in order to grind down inflation.