Mid-Morning Market Update: Markets Open Lower; Target Earnings Miss Views

U.S. stocks traded lower this morning, with the Dow Jones dropping more than 400 points on Wednesday.

Following the market opening Wednesday, the Dow traded down 1.42% to 32,191.77 while the NASDAQ fell 1.99% to 11,746.34. The S&P also fell, dropping, 1.76% to 4,017.01.

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Leading and Lagging Sectors

Utilities shares fell by just 0.2% on Wednesday. Meanwhile, top gainers in the sector included Huaneng Power International, Inc. HNP, up 6% and Hawaiian Electric Industries, Inc. HE up 3%.

In trading on Wednesday, consumer discretionary shares dipped 3.4%.

Top Headline

Target Corporation TGT reported weaker-than-expected earnings for its first quarter on Wednesday.

Target reported first-quarter FY22 sales growth of 4% year-on-year to $25.17 billion, beating the consensus of $24.37 billion. Adjusted EPS of $2.19 missed the consensus of $3.07.

Target continues to expect FY22 revenue growth of low- to mid-single-digit. The company expects an FY22 operating income margin rate of around 6%.

 

Equities Trading UP

Decisionpoint Systems, Inc. DPSI shares shot up 46% to $6.97. DecisionPoint Systems recently reported first-quarter FY22 revenue growth of 22.7% year-on-year to $19.7 million.

Shares of DLocal Limited DLO got a boost, shooting 20% to $23.14 after the company reported better-than-expected Q1 sales results.

OTR Acquisition Corp. OTRA shares were also up, gaining 18% to $12.15. OTR Acquisition, last week, completed its merger vote with Comera Life Sciences.

Equities Trading DOWN

Target Corporation TGT shares tumbled 25% to $161.42 after the company reported worse-than-expected Q1 earnings and also reported a drop in operating income margin rate.

Shares of Visionary Education Technology Holdings Group Inc. VEDU were down 22% to $19.50. Visionary Education recently priced its IPO at $4 per share.

Triumph Group, Inc. TGI was down, falling 21% to $17.34 after the company reported worse-than-expected Q4 results. The company also issued FY23 sales guidance below analyst estimates.

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Commodities

In commodity news, oil traded down 0.1% to $112.39, while gold traded down 0.6% to $1,808.50.

Silver traded down 1.3% to $21.475 on Wednesday while copper fell 0.8% to $4.2045.

Euro zone

European shares were lower today. The eurozone’s STOXX 600 dropped 0.9%, London’s FTSE 100 fell 0.5% and Spain’s IBEX 35 Index rose 0.1%. The German DAX dipped 0.8%, French CAC 40 fell 0.9% and Italy’s FTSE MIB Index fell 0.5%.

UK’s producer inflation increased 14% year-over-year in April from 11.9% in March, while annual inflation rate accelerated to 9% in April, the highest since 1982. Passenger car sales in the European Union dipped 20.6% year-over-year to 684,506 units in April.

Economics

Housing starts dropped 0.2% from a month ago to an annualized rate of 1.724 million units in April following a revised 2.8% decline in March. Building permits declined 3.2% to an annual rate of 1.819 million in April.

The Energy Information Administration’s weekly report on petroleum inventories in the U.S. is scheduled for release at 10:30 a.m. ET.

The Treasury is set to auction 52-week bills at 11:30 a.m. ET.

The Treasury will auction 20-year bonds at 1:00 p.m. ET.

Philadelphia Federal Reserve Bank President Patrick Harker is set to speak at 4:00 p.m. ET.
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COVID-19 Update

The U.S. has the highest number of coronavirus cases and deaths in the world, reporting a total of 84,473,440 cases with around 1,027,280 deaths. India confirmed a total of at least 43,127,190 cases and 524,290 deaths, while Brazil reported over 30,728,280 COVID-19 cases with 665,270 deaths. In total, there were at least 524,246,130 cases of COVID-19 worldwide with more than 6,292,850 deaths.