Stocks fall sharply today - More than 95% of stocks in S&P 500 down

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Stocks fall sharply as Target’s woes renew inflation fears

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Stocks closed sharply lower on Wall Street Wednesday as dismal results from Target renewed fears that inflation is battering U.S. companies. The S&P 500, the benchmark for many index funds, fell 4%. Target lost a quarter of its value, dragging other retailers down with it, after saying its profit fell by half in the latest quarter as costs for freight and transportation spiked. That comes a day after Walmart cited inflation for its own weak results. The Dow Jones Industrial Average dropped 1,164 points, or 3.6% and the tech-heavy Nasaq pulled back 4.7%. Treasury yields fell as investors sought safer ground.

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The Dow Jones Industrial Average sank more than 1,100 points Wednesday, as big earnings misses by Target and other major retailers stoked investors’ fears that surging inflation could cut deeply into corporate profits.

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The S&P 500 fell 4% as of 3:16 p.m. Eastern. The benchmark index is now down more than 18% from the record high it reached at the beginning of the year. That’s shy of the 20% decline that’s considered a bear market.

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Target lost a quarter of its value after reporting earnings that fell far short of analysts’ forecasts. In a sign of the impact of inflation, particularly on shipping costs, Target said its operating margin for the first quarter was 5.3%. It had been expecting 8% or higher. The company also said consumers returned to more normal spending habits, switching away from TVs and appliances and buying more toys and travel-related items.

The report comes a day after Walmart said its profit took a hit from higher costs. The nation’s largest retailer fell 7.2%, adding to its losses from Tuesday.

The weak reports stoked concerns that persistently rising inflation is putting a tighter squeeze on a wide range of businesses and could cut deeper into their profits.

Retailers had some of the biggest losses. Dollar Tree fell 15.4% and Dollar General slumped 11.8%. Best Buy fell 11.6% and Amazon fell 7%.

Technology stocks, which led the market rally a day earlier, were the biggest drag on the S&P 500. Apple lost 5.9%.

All told, more than 95% of stocks in the S&P 500 were down.

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