PARIS (Reuters) – The New York Stock Exchange opened lower on Wednesday, hurt in particular by the results of the distribution sector which reignited fears about inflation and the evolution of consumer behavior as bond yields rose, pending the publication of the minutes of the last US Federal Reserve meeting, weighs on growth stocks.
In early trading, the Dow Jones index lost 191.87 points, or 0.56%, to 33,960.14 points and the broader Standard & Poor’s 500 fell 0.75% to 4,272.71 points.
The Nasdaq Composite lost 1%, or 130.78 points, to 12,971.76.
The Dow and the S&P-500, which had benefited in previous sessions from the encouraging results of Walmart and Home Depot, are weighed down by Target, whose share price fell by 4.3% and the sector index by 1.1%. . The American supermarket group published on Wednesday a quarterly profit down 90% and like-for-like sales below expectations, a consequence of the impact of inflation on unconstrained consumption despite major promotions.
Lowe’s, the number two US DIY store, meanwhile, reported an unexpected drop in like-for-like sales in the second quarter of its fiscal year. The title is however stable, the group having declared to expect annual earnings per share at the top of the range indicated above.
“We need to see a real decline in inflation. The retail sector since the release of results this week does not confirm the scenario that inflation has peaked,” said Brian Overby, analyst at Ally.
On the economic indicator side, the US Department of Commerce announced an hour before the opening of Wall Street that retail sales had stagnated last month while economists polled by Reuters forecast an average increase of 0.1%.
Investors are now waiting at 6:00 p.m. GMT for the “minutes” of the Fed’s July meeting which could help to better assess the risk of a recession and the extent of the expected rate hike by the US central bank in September.
With traders pricing the likelihood of a 50bps and 75bps rate hike equally, two-year and 10-year Treasury yields rise nine points to 3.345% and five points, respectively. at 2.880%.
This affects growth stocks like Amazon and Tesla, which are down 1.22% and 1.43% respectively, while the high-tech sector index is down 0.86%.
(Written by Claude Chendjou, edited by Kate Entringer)
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