Dow Stumbles On Tech Crisis Caused By Micron, Target Tank Retailers By


© Reuters

By Yasin Ebrahim — The Dow Jones slipped into the red late in Wednesday’s close, pressured by a Micron-fueled tech slump and heavy retail losses Target just as better-than-expected retail sales data rekindled fears of more hawkish monetary policy tightening from the Federal Reserve.

The slid 0.1%, or 39 points, the fell 1.54% and the fell 0.8%.

The Commerce Department said retail sales rose, beating estimates of the expected 1.0% gain. The retail sales watchdog – which has a bigger impact on US GDP – beat expectations with a 0.3% rise.

The strong data is a “decent indication that nominal demand remains fairly robust … suggesting the Fed still has some work to do to bring it in line with overall supply,” Jefferies said in a note.

Tech stocks took a breather after their recent meltdown under pressure from a Micron-led slump in semiconductor stocks.

Micron Technology (NASDAQ:) tumbled more than 6% after the chipmaker warned that the market outlook for 2023 “has weakened” and cut capital spending amid plans to cut l ‘offer.

“We believe there is potential for a longer demand trough that could weigh on the broader tech space (e.g., a recovery that begins later in 2023 or is weaker than expected),” said Wedbush after Micron’s announcement.

Target (NYSE:) fell 13%, plunging the broader retail sector into the red after the retailer announced a 50% drop in profits and cut its fourth quarter forecast, highlighting guard against a weaker vacation quarter.

Lowe’s (NYSE:) climbed 3% against the downward trend after reporting it beat analysts’ estimates.

Advanced auto parts (NYSE:) fell 15% after reporting quarterly results on both the top and bottom results, prompting a series of downgrades from Wall Street analysts. UBS downgraded the stock to neutral for the long, while Wedbush cut its price target on the stock to $165 from $200.

Despite the broader market decline, some on Wall Street continue to bet that stocks will likely rise through the end of the year, although the advance is unlikely to be smooth.

“We like markets overall pushing slightly higher through the end of the year, but that shouldn’t assume it will be smooth trading as macro uncertainty remains high even after some of the inflation data has started to cool,” Janney Montgomery Scott said in a note.


Comments are closed.