Stocks sink as Target’s woes stoke fears

NEW YORK — 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.

The broad sell-off erased gains from a solid rally a day earlier, the latest volatile dayto-day swing for stocks in recent weeks amid a deepening market slump.

Retailers had some of the biggest losses. Dollar Tree fell 16.3% and Dollar General slumped 12.1%. Best Buy fell 11.4% and Amazon fell 6.3%.

Makers of household goods and grocery stores also fell sharply. Kroger slipped 5.8% and Procter & Gamble fell 5.6%.

Technology stocks, which led the market rally a day earlier, were the biggest drag on the S&P 500. Apple lost 4.9%.

All told, more than 95% of stocks in the S&P 500 were down. Utilities also weighed down the index, though not nearly as much as the other 10 sectors, as investors shifted money to investments that are considered less risky.

Bond yields fell. The yield on the 10-year Treasury fell to 2.88% from 2.97% late Tuesday.

The disappointing report from Target came a day after the market cheered an encouraging report from the Commerce Department that showed retail sales rose in April, driven by higher sales of cars, electronics, and more spending at restaurants.

Stocks have been struggling to pull out of a slump over the last six weeks as concerns pile up for investors. Trading has been choppy on a daily basis and any data on retailers and consumers is being closely monitored by investors as they try to determine the impact from inflation and whether it will prompt a slowdown in spending. A bigger-than-expected hit to spending could signal more sluggish economic growth ahead.

The Fed is trying to temper the impact from the highest inflation in four decades by raising interest rates.