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U.S. stocks closed modestly lower Wednesday after the retail giant Target blamed disappointing earnings on falling demand and downgraded its outlook for the holiday shopping season.
The Dow Jones Industrial Average fell 39.22 points, or 0.12%, to close at 33,553.70. The S&P 500 fell 39.22 points, or 0.12%, to close at 3,958.88, and the Nasdaq Composite fell 174.75 points, or 1.54%, to close at 11,183.66.
Target (TGT) shares fell $23.49, or 13.12%, to close at $155.49. Other retailers also saw their price of shares fall, including Macy’s (M), Kohl’s (KSS), Nordstrom (JWN) and Gap (GAP).
Target’s downturn came amid the Commerce Department reporting a sharp increase in retail sales in October, a sign that high inflation remains stubborn even after two reports last week showed the rate of increase slowing. The Federal Reserve is expected to continue raising interest rates into 2023 to cool the economy and stifle inflation.
Some of the other stocks that fell Tuesday included Meta Platforms (META), which closed at $113.23, down $3.85, or 3.29%. Tesla‘s (TSLA) price of shares fell $8.35, or 4.29%, to close at $186.07.
“Retail sales data suggested consumers are willing to spend, particularly on big topic items while the retail bellwether Target warned of a weaker holiday season,” Brian Levitt, Global Market Strategist at Invesco, told CNBC. “The latter is more in line with our expectations. Tighter monetary policy is designed to make people feel less wealthy. The idea is to slow consumption, allowing inflation to moderate. Ironically that will also set the stage for a recovery.”
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