Target lost more than a quarter of its market value on Wall Street on Wednesday. The supermarket group struggled with higher costs for transport and wages and made much less profit last quarter than experts had expected. Target CEO Brian Cornell spoke of “unusually high costs”.
The company also suffered from supply problems. The day before, supermarket group Walmart was severely punished after disappointing results due to higher costs.
Concerns that high inflation is beginning to put pressure on consumer spending also caused a negative mood on the stock markets in New York after the strong recovery the day before. Shortly after opening, the Dow-Jones index was down 1.2 percent at 32,261 points. The broad S&P 500 fell 1.5 percent to 4028 points, and tech gauge Nasdaq fell 1.8 percent to 11,771 points.
Walmart continued its decline, losing nearly 4 percent. On Tuesday, the supermarket group experienced its worst trading day since 1987, with a price drop of more than 11 percent.
DIY chain Lowe’s lost 1.5 percent. The group saw its turnover fall in the first quarter. Colder weather in the reporting period has caused Lowe’s to see a decline in demand for DIY items for outdoor projects. However, the profit was higher than expected. The company also maintained its forecasts for the full year.
Analog Devices gained 0.6 percent on better-than-expected quarterly results from the chipmaker. Shoe retailer Shoe Carnival fell 0.1 percent, despite raising expectations for the full year.
Carrier Global lost 4 percent. Analysts at Bank of America Securities removed the manufacturers of ventilation and air conditioning systems from their buy list. Microsoft fell 2 percent. The tech and software group will make its cloud services more accessible to European cloud companies. Microsoft is thus bowing to pressure from the European Union to make it easier for smaller European competitors to offer the company’s software.
The euro was worth $1.0524 against $1.0533 a day earlier. A barrel of US oil costs 0.2 percent more at $112.66. Brent oil became 0.1 percent more expensive at 112.10 dollars a barrel.