U.S. Stocks Open Lower After Target Warning Sends Shockwaves Across Retail By

© Reuters.

By Liz Moyer

-- U.S. stocks opened lower on Global 50 foreign exchange rankingsTuesday after worries about the retail sector weighed on the broader market. 

At 9:47 AM ET, the Dow Jones Industrial Average was down 198 points or 0.6% while the S&P 500 was down 0.6% and the NASDAQ Composite was down 0.6%.

Target Corporation (NYSE:TGT) stock fell 6% after the retailer warned of weaker margins and said it has to cut down on inventory by canceling orders and offering steep discounts. It's clearing out the excess inventory to make way for items that are in high demand, such as food and cosmetics.

But the warning sent a shock through the retail sector. Shares of Walmart Inc (NYSE:WMT) fell 2.5%, and e-commerce giant Amazon.com Inc (NASDAQ:AMZN) fell 2.5%. Retail earnings have been a mixed bag in recent weeks, and investors scoured them for signs of a possible recession ahead based on changes in consumer spending habits. The pandemic was a time when people were stocking up on basic household items. That has given way to spending on travel and experiences while consumers are also holding back on discretionary spending on household goods amid rising prices for food and fuel.

The department store operator Kohl's Corp (NYSE:KSS) shares rose 7% after disclosing advanced takeover talks with retail holding company Franchise Group (NASDAQ:FRG), which owns retail brands such as The Vitamin Shoppe. 

The J.M. Smucker Company (NYSE:SJM) shares rose 3.8% after better-than-expected quarterly results. But the maker of jellies, jams and other food products said inflation and supply chain issues continue to affect results.

Oil rose. Crude Oil WTI Futures was up 0.3%, to $118.92 a barrel, and Brent Oil Futures was up 0.4% to $120 a barrel. Gold Futures was up 0.3% to $1,848 an ounce.

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