Stock Market Today Mid-Morning Updates
On Wednesday, the Dow Jones Industrial Average is down by 400 points as investors continue to dissect another slew of retail earnings. This builds from yesterday’s retail earnings with notable names like Home Depot (NYSE: HD) reporting a strong quarter. Lowe’s (NYSE: LOW) on the other hand missed revenue expectations for the first quarter. The company reported lower sales as a cool spring weather hurt demand for supplies for its outdoor DIY projects.
Investors are also likely reacting to Fed Chair Jerome Powell’s tough stance on inflation in an interview with the Wall Street Journal. In brief, he says that the Fed will not hesitate to continue raising interest rates until inflation comes down. This follows the Fed raising benchmark borrowing rates by half a percentage point, the second increase in 2022 as inflation remains around a 40-year high. Penn National Gaming (NASDAQ: PENN) is in focus today after Jefferies upgraded the stock to a Buy rating, noting that the current stock price only assigns a minimal value to Penn’s digital operations.
Among the Dow Jones leaders, shares of Apple are down by 1.99% today while Microsoft (NASDAQ: MSFT) is also down by 1.67%. Meanwhile, Disney (NYSE: DIS) and Nike (NYSE: NKE) are trading lower on Wednesday. Among the Dow financial leaders, Visa (NYSE: V) is up by 0.15% while JPMorgan Chase (NYSE: JPM) is down by 0.37%.
Shares of EV leader Tesla (NASDAQ: TSLA) are down by 0.91% on Wednesday. Rival EV companies like Rivian (NASDAQ: RIVN) are up by 1.99%. Lucid Group (NASDAQ: LCID) is down by 0.76% today. Chinese EV leaders like Nio (NYSE: NIO) and Xpeng Motors (NYSE: XPEV) are trading mixed today.
Dow Jones Today: U.S. Treasury Yields Holds Near 3% On April Housing Data Decline
Following the stock market opening on Wednesday, the S&P 500, Dow, and Nasdaq are trading lower at 1.53%, 1.33%, and 1.52%. Among exchange-traded funds, the Nasdaq 100 tracker Invesco QQQ Trust (NASDAQ: QQQ) is down by 1.67% while the SPDR S&P 500 ETF (NYSEARCA: SPY) is also down by 1.56%.
The benchmark 10-year U.S. Treasury yield ticked around 2.96% today as the government released its April housing and building permit reports. The report indicates a decline in construction activity. Housing starts last month were at an adjusted annual rate of 1.72 million, below consensus estimates. Building permits in April however, matched expectations. In addition to that, weekly mortgage demand from homebuyers is down by 12% as higher rates begin to take its toll.
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Target Stock Sinks As Growing Costs And Inventory Weigh In On Quarterly Earnings
In the news today is Target (NYSE: TGT), another leading name in the retail industry reporting earnings. Following its latest quarterly financial update, TGT stock is currently down by over 23%. According to the press release, the company’s total quarterly revenue is $25.17 billion. Also in the report, Target recorded earnings of $2.19 per share for the quarter. For reference, the consensus on Wall Street were a revenue of $24.49 billion and an earnings of $3.07. Overall, the company’s results would be similar to that of Walmart’s (NYSE: WMT). Both firms’ quarterly earnings were below consensus analyst projections on Wall Street.
Likewise, Target is also experiencing similar headwinds as growing inflation contributes to greater freight costs and more price cuts on items. Even so, the company’s comparable sales are up by 3.3% year-over-year. To compare, the consensus on Wall Street was a 0.8% increase. Providing an overview of the company’s performance for the quarter is CEO Brian Cornell. He says that Target mainly missed its goals due to profits being “accompanied by unusually high costs.” Cornell also adds, “While we saw healthy top line growth in the quarter, we were less profitable than we expected to be or intend to be over time.”
Looking forward, the company is reiterating its current revenue forecast of “mid single-digit growth,” this year. In closing, Cornell states, “Despite these near-term challenges, our team remains passionately dedicated to our guests and serving their needs, giving us continued confidence in our long-term financial algorithm, which anticipates mid-single digit revenue growth, and an operating margin rate of 8 percent or higher over time.” As such, for investors looking for deals among retail stocks, TGT stock could be an attractive play today.
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TJX Stock Gains Following Beat On Earnings; Raises Quarterly Dividend And Expands
At the same time, TJX Companies (NYSE: TJX), the parent company of the TJ Maxx department store chain, is also in focus. Unlike its larger competitors, TJX appears to be gaining traction amongst investors. Evidently, TJX stock is currently looking at gains of over 6% at today’s opening bell. For the most part, this is thanks to the company reporting solid figures in its latest quarterly earnings update. Particularly, according to the press release, TJX’s earnings per share for the quarter is $0.68. To compare, the consensus on Wall Street is $0.60.
Not to mention, the company is also raising its quarterly dividend by 13% to $0.295 per share. Based on the earnings release, this is payable on June 2, 2022, to shareholders of record on May 12, 2022. According to CEO Ernie Herrman, this marks TJX’s “25th dividend increase over the last 26 years.” Also in the earnings release, TJX is planning to repurchase $2.25 to $2.50 billion of TJX stock throughout the current fiscal year. On the whole, the company cites the overall quality of merchandise and comfortable inventory levels as key long-term growth drivers now. In the words of Herrman, “We believe our value proposition is as appealing as ever for consumers in today’s retail environment, and we are excited about our initiatives to drive customer traffic and sales. We remain focused on our long-term vision to become an increasingly profitable, $60-billion-plus company.” With all this in mind, I could see investors turning their attention toward TJX stock today.
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