Dow ends ugly session 3.6% lower, Nasdaq slumps 4.7%

WALL Street stocks suffered through another brutal session on Wednesday after disappointing results from Target exacerbated worries about inflation and profit margins in a slowing economy. The Dow Jones Industrial Average dove more than 1,150 points, or 3.6 per cent, to finish at 31,490.07 as all 30 members of the Dow closed in the red. The broad-based S&P 500 slumped 4.0 per cent to end the session at 3,923.68, while the tech-rich Nasdaq Composite Index tumbled 4.7 per cent to 11,418.15. Target, the North American-focused big-box retailer, plunged around 25 per cent after earnings missed expectations despite higher sales. The company pointed to the hit from higher operating costs in results that echoed those of bigger rival Walmart, which had an ugly day on Tuesday. The retailers said profits were under pressure and some consumers were avoiding discretionary purchases as prices for food, petrol and other household staples rise. Consumer-oriented names were among the most punished on Wednesday, with Procter & Gamble losing 6.2 per cent, Coca-Cola 7.0 per cent and Walgreens Boots Alliance 8.4 per cent. The weak Target results come in a market already buffeted by recession fears as the Federal Reserve raises interest rates to counter inflation. “We started off weak because Target released that horrible profit guidance,” said LBBW’s Karl Haeling. “Then, from what I can see, the market sell-off just fed on itself and the more it went down the more it turned the market’s attention to worries about earnings, profit margins, recession, you name it.” AFP