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International Market Update
- European stock markets closed lower Wednesday as inflation fears unsettled markets on both sides of the Atlantic. The pan-European Stoxx 600 closed down about 1.1%, with technology stocks leading the losses with a 2.8% drop, while most sectors and major bourses were in the red. U.K.. inflation rose to a 40-year high of 9% in April as food and energy prices soared, official figures showed Wednesday, exacerbating the country’s cost-of-living crisis. Before the bell, results were released by ABN AMRO, Burberry, British Land and Premier Foods.
- The Dow Jones Industrial Average posted its biggest loss since 2020 on Wednesday after another major retailer warned of rising cost pressures. That confirmed investors’ worst fears about rising inflation and reignited the brutal selloff of 2022. Shares of Target plunged 24.9% Wednesday after the retailer reported a first-quarter profit that fell well short of Wall Street estimates due to higher fuel and severance costs. The retailer also reported lower-than-expected sales of consumer goods such as televisions. Lowe’s fell 5.3% after missing sales expectations in its first-quarter report as customers bought fewer accessories for outdoor projects.
- Most Asia-Pacific markets fell sharply this morning following sharp losses on Wall Street overnight. Hong Kong’s Hang Seng Index led the region’s losses, falling 2.72% in morning trading. Shares in the Chinese technology company Tencent slumped 7.55% after the company’s quarterly profit fell by half. Other Chinese tech stocks in Hong Kong also posted sharp losses, with Alibaba falling 6.56%, while Meituan gave up 4.07%. Japan’s exports rose 12.5% in April from a year earlier, according to data released by Japan’s
Ministry of Finance this morning.
In International News
Target shares drop 25% after company says high costs and inventories hurt profits
Target reported quarterly profit Wednesday that fell far short of Wall Street expectations as the retailer struggled with expensive freight costs, higher markdowns and lower-than-expected sales of consumer goods ranging from televisions to bicycles. The company’s shares fell nearly 25%, hitting a 52-week low. The company’s market capitalization, which stood at $99.82 billion after the market closed Tuesday, fell to about $75 billion Wednesday. Adjusted earnings per share were $2.19 versus $3.07 as expected, while revenue was $25.17 billion versus $24.49 billion as expected. Comparable sales, a key metric that tracks sales at stores open at least 13 months and online, rose 3.3% in the first quarter.
Lowe’s sales decline: cool spring weather weighs on demand for outdoor products
Lowe’s on Wednesday missed Wall Street sales expectations for its fiscal first quarter as cooler spring weather hurt demand for products used in outdoor home improvement projects. Earnings per share were $3.51 versus $3.22 expected, while revenue was $23.66 billion versus $23.76 billion expected. Lowe’s reiterated its full-year outlook, projecting total sales between $97 billion and $99 billion and a 1% decline to a 1% increase in same-shop sales. Lowe’s net income for the quarter rose slightly to $2.33 billion, or $3.51 per share, compared with $2.32 billion, or $3.21 per share, in the year-ago quarter. The results were above analysts polled by Refinitiv’s expectations of $3.22. Net sales fell to $23.66 billion from $24.42 billion a year earlier, missing analysts’ expectations of $23.76 billion.