Stocks were headed to a weak open on Wednesday, pushed lower by weak earnings from giant retailers like Target (TGT) .
Target shares were trading down 5.6% to $92.58 in premarket trading after the retailer reported comparable sales, those in stores open at least a year, were down 3.8% from a year ago.
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Home-improvement retailer Lowe’s (LOW) shares were up 2% although sales were lower than they were a year earlier.
Futures trading suggested the Standard & Poor’s 500 Index was looking at a 31-point drop at the open. Trading in the Nasdaq-100 index futures were off more than 110 points. The Nasdaq-100 has a deep concentration in big technology stocks.
Futures based on the Dow Jones Industrial Average were off more than 290 points.
The major averages fell in Tuesday trading with the S&P 500 and the Nasdaq-100 down 0.4%. The Dow was off 0.3%.
Target cuts guidance
Target cut its annual earnings guidance to $8 to $10 a share. The company blamed tariff unease and consumer worries about the economy.
The company expects tariff increases to cut into fiscal-second-quarter profit and warned it might have to raise some prices to cope with higher tariff costs.
Shopper checking out purchases at Target.
Image source: Universal Images Group via Getty Images
Last week, Walmart (WMT) made the same warning for goods imported from China and elsewhere. President Donald Trump criticized the company and over the weekend said Walmart should eat the tariff costs.
Just about all of Target’s lines saw sales decreases, led by an 8.5% decline in home furnishings and decor and a 4.8% decline in apparel sales.
Food and beverage sales were up slightly.
Bond yields move higher
Bond yields were rising on growing concern about how a tax-cut bill being debated in Congress could add to the federal deficit.
The 30-year Treasury yield moved above 5%, its highest level this year. The 10-year yield was moving above4.5%. The 10-year yield is a key determinant of mortgage rates.
Crude oil and gold were both moving higher.
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