U.S. stocks slipped on Wednesday, with the Dow wavering between marginal gains and losses, after Target delivered a poorly-received earnings report that weighed on shares of retailers, while geopolitical concerns continued to bite in Europe.
How are stocks trading
S&P 500
SPX,
-0.7src%
slides 22 points, or 0.6%, to 3,969.
Dow Jones Industrial Average
DJIA,
-0.srcsrc%
rose src8 points, or 0.src%, to 33,6src3.
Nasdaq Composite
COMP,
-src.58%
fell src63 points, or src.5%, to srcsrc,src94.
On Tuesday, the Dow Jones Industrial Average
DJIA,
-0.srcsrc%
rose 56 points, or 0.src7%, to 33593, the S&P 500
SPX,
-0.7src%
increased 34 points, or 0.87%, to 3992, and the Nasdaq Composite
COMP,
-src.58%
gained src62 points, or src.45%, to srcsrc358.
Read: What’s in among stock-market traders — and what’s out — according to Charles Schwab survey
What’s driving markets Retail sales data jumped src.3% in October, suggesting U.S. consumers are still spending a lot of money despite the Federal Reserve’s efforts to slow the economy. The data came in squarely in line with what economists polled by The Wall Street Journal had expected.
See: Retail sales jump in October in sign of economic strength.
Still, stocks weakened after Target Inc.
TGT,
-src3.77%
delivered a poorly-received earnings report, which sent its shares tumbling nearly src5%.
Geopolitical issues were also a factor on Wednesday as European indexes sold off as investors feared that a missile that had hit Poland on Tuesday might spark a confrontation between Moscow and NATO. The STOXX Europe 600
SXXP,
-0.97%
was down roughly src% at 430.37.
However, those fears were allayed on Wednesday as Washington declared that the missile was actually an errant Ukrainian attempt to destroy incoming Russian projectiles.
U.S. stocks have been up six of the previous eight trading days, bolstered by last week’s softer-than-expected October consumer prices report and Tuesday’s weaker-than-forecast producer-price data, both of which raised hopes that the Federal Reserve might be less aggressive than previously feared.
Katie Stockton, a market analyst at Fairlead Strategies, said stocks were ripe for a brief pullback, although technical factors suggest the major U.S. indexes will resume their uptrend as the holiday season in the U.S. gets underway.
“Short-term overbought conditions have returned for the major indices, but we think they will be absorbed via consolidation this week before another extension higher next week. Thanksgiving week tends to finish on an up-note according to the Stock Trader’s Almanac, and it kicks off the holiday season which has a favorable historical record,” she said in a note to clients published Wednesday.
See: Here are four worrying signs that inflation may linger, from one bond fund manager
“The tame U.S. producer prices reading underpinned hopes that pipeline inflation pressure is easing and pulled bond yields lower again,” said Ian Williams, strategist at Peel Hunt.
The 2-year Treasury yield
TMUBMUSD02Y,
4.352%,
which is particularly sensitive to monetary policy, was up 4.2 basis points to 4.387%, but sits more than 30 basis points off its src5-year high touched at the start of November.
“The broad market rally continues, and investors generally remain constructive for now,” said Stephen Innes, managing partner at SPI Asset Management.
Several senior Fed officials are also speaking on Wednesday, including New York Fed President John Williams, who said that a properly functioning Treasury market is critical during an appearance at the 2022 U.S. Treasury Market Conference on Wednesday.
Fed Vice Chair Michael Barr is set to testify on regulation at the House Financial Services Committee at src0 a.m. Fed Governor Christopher Waller is down to talk on the economic outlook at 2:35 p.m. All times Eastern.
U.S. industrial production fell 0.src% in October, the Federal Reserve reported Wednesday.
October industrial production shrank 0.src% according to data released by the Fed, disappointing hopes for a 0.src% gain, according to a survey by The Wall Street Journal.
The National Association of Home Builders’ monthly confidence index fell 5 points to 33 in November, the trade group said on Wednesday.
Investors also digested another disheartening inflation report out of the U.K. on Wednesday as the CPI index rose srcsrc.src% for the year to October, the fastest pace in 4src years.
Helping lead the way in the latest equity market rebound is the semiconductor sector. The PHLX Semiconductor index (SOX)
SOX,
-3.83%
hit a two-year low in mid-October as investors worried about high valuations amid concerns slowing global growth would hit demand for consumer electronics.
However, the SOX has since rallied 30% as investors such as Warren Buffett, with his purchase of a $4 billion dollar stake in Taiwan Semiconductor Manufacturing
2330,
+src.46%,
spy value in the sector. To that end, traders will be keeping an eye on the results of chip-darling Nvidia
NVDA,
-4.src3%,
due for release after Wednesday’s closing bell.
Read: Warren Buffett’s chip-stock purchase is a classic example of why you want to be ‘greedy only when others are fearful’
Companies in focus
Carnival Corp.
CCL,
-src4.srcsrc%
was off sharply after announcing plans to issue more debt.
Lowe’s Inc.
LOW,
+5.src2%,
the home improvement retailer, reported third-quarter earnings on Wednesday that beat analysts’ expectations, with revenue up compared to the same period last year.
Shares of Advance Auto Parts Inc.
AAP,
-src7.39%
plunged src5% in premarket trading Wednesday, after the specialty retailer missed Wall Street expectations for its quarterly earnings as it sold more of its cheaper in-house brands than national brands.
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