NEW YORK (AFP) – Wall Street stocks declined on Wednesday (Aug 17) following mixed retail sales and earnings reports as the market’s July and August rally showed signs of fatigue.
US retail sales flatlined at US$682.8 billion (S$940 billion) in July as gasoline prices retreated from record levels while American consumers boosted spending on furniture, food, electronics and at online stores.
Earnings from big-box chains were also mixed, with Lowe’s topping profit estimates but Target suffering a big drop in earnings as the retailer contends with rising costs.
“The market had been overbought, coming into this week,” said Quincy Krosby of LPL Financial, who added that investors were trying to “digest” recent gains.
The Dow Jones Industrial Average dipped 0.5 per cent to close at 33,980.32.
The broad-based S&P 500 shed 0.7 per cent to end at 4,274.04, while the tech-rich Nasdaq Composite Index tumbled 1.3 per cent to 12,938.12.
Minutes from the latest Federal Reserve meeting in July showed the central bank was committed to raising interest rates further to quell rising prices.
But many officials at the meeting cautioned that there is a “risk” the Fed could go too far as it tries to cool demand to lower prices that have surged at the fastest pace in more than 40 years.
The rapid, aggressive moves by the central bank have started to have an impact, and while officials say the US economy should continue to expand in the second half of the year, “many expected that growth in economic activity would be at a below-trend pace,” the minutes said.
Among individual companies, Target dropped 2.9 per cent, while Lowe’s gained 0.6 per cent and TJ Maxx parent TJX, which also reported results, climbed 2.9 per cent.