US close: Stocks firmer despite inflation concerns, Target warning

US stocks managed a positive finish on Tuesday, as investors shrugged off concerns about surging inflation and economic growth, as well as a cut in quarterly margin forecast by retailer Target.

The Dow Jones Industrial Average ended the session up 0.8% at 33,180.14, as the S&P 500 added 0.95% to 4,160.68 and the Nasdaq Composite was 0.94% firmer at 12,175.23.

“What threatened to turn into a nasty afternoon for risk assets seems to have been headed off for now by a wave of buying,” said IG chief market analyst Chris Beauchamp.

“Target’s warning about rising inventories and the hit to margins seemed to be the spark markets had been looking for to drive a fresh big move lower, but it looks like this bear market rally isn’t rolling over just yet.”

Beauchamp noted that insider buying in tech stocks was continuing “at a heavy pace”, which seemed to provide some comfort to the broader market.

“It is also interesting that equities have weathered the RBA’s increased pace of rate hikes, but with the ECB and US CPI still to come this week the big issues are set to make a return.”

All three of Wall Street’s indices started the day in negative territory, as investors digested a bigger-than-expected 50 basis point cash rate hike from the Reserve Bank of Australia to 0.85% as it looked to curb inflation.

Analysts had pencilled in a 25-basis point hike.

"The move has just poured a bit of cold water on yesterday’s risk-on mood, which had already cooled somewhat following the rise in US bond yields last night as the 10-year Treasury climbed back above 3% to its highest level in a month,” said Neil Wilson, chief market analyst at Markets.com.

"Whether higher bond yields have as much of a marginal impact on equities as they did a few weeks ago is up for debate - the market has seen 3% already and come back to it.”

Wilson said the market knew rates were rising near-term, so the question was one of whether the stock market had adjusted yet.

“On that front, the real uncertainty lies in earnings and whether inflation has peaked - US CPI later this week is important on that front.”

On the corporate front, Kohl’s jumped 9.54% after it confirmed it was in exclusive negotiations with retail holding company Franchise Group about a possible takeover that would value the US department store chain at around $8bn.

Consumer technology giant Apple was 1.76% firmer after it took the wraps off its latest MacBook laptops, as well as new features for the iOS mobile operating system.

On the downside, big-box discount retail giant Target slid 2.31% after it said it would need to offer deeper discounts and cut back on stocking discretionary items as inflation hit spending.

The company said it anticipated an operating margin rate of 2% for the second quarter - lower than the outlook it gave less than three weeks ago when it reported a wider-than-expected fiscal first-quarter earnings miss, which sent the stock down by a quarter.

Goodyear Tyre & Rubber was off 0.37% after it announced a recall of over 173,000 tyres, after a number of road deaths and injuries were attributed to defects.

Reporting by Josh White at Sharecast.com. Additional reporting by Frank Prenesti.

Dow Jones - Risers

Salesforce.Com Inc. (CRM) $187.12 2.34%
Chevron Corp. (CVX) $180.20 1.91%
Apple Inc. (AAPL) $148.71 1.76%
Caterpillar Inc. (CAT) $227.11 1.55%
Unitedhealth Group Inc. (UNH) $496.95 1.41%
Microsoft Corp. (MSFT) $272.50 1.40%
Nike Inc. (NKE) $121.67 1.20%
Boeing Co. (BA) $140.81 1.13%
Procter & Gamble Co. (PG) $146.94 1.11%
Johnson & Johnson (JNJ) $178.34 1.10%

Dow Jones - Fallers

Walmart Inc. (WMT) $123.33 -1.20%
Walgreens Boots Alliance, Inc. (WBA) $43.00 -0.90%
Home Depot Inc. (HD) $301.77 -0.70%
International Business Machines Corporation (CDI) (IBM) $142.78 -0.07%
Walt Disney Co. (DIS) $107.79 -0.04%
Honeywell International Inc. (HON) $230.94 0.00%
Dowdupont Inc. (DWDP) $30.52 0.00%
JP Morgan Chase & Co. (JPM) $130.04 0.26%
Goldman Sachs Group Inc. (GS) $321.51 0.31%
McDonald's Corp. (MCD) $248.95 0.35%

S&P 500 - Risers

Kohls Corp. (KSS) $45.59 8.24%
Fluor Corp. (FLR) $29.50 6.53%
HF Sinclair Corporation (DINO) $57.56 6.02%
Apache Corp. (APA) $51.39 5.85%
J. M. Smucker Co. (SJM) $130.37 5.72%
Valero Energy Corp. (VLO) $145.09 4.61%
Exxon Mobil Corp. (XOM) $103.37 4.58%
ConocoPhillips (COP) $122.71 4.54%
Marathon Petroleum Corporation (MPC) $113.65 3.89%
United Airlines Holdings Inc (UAL) $46.45 3.78%

S&P 500 - Fallers

Mosaic Company (MOS) $57.18 -4.00%
J.B. Hunt Transport Services Inc. (JBHT) $176.57 -2.49%
Target Corp. (TGT) $155.98 -2.31%
CH Robinson Worldwide Inc (CHRW) $107.09 -2.06%
Advance Auto Parts (AAP) $186.80 -2.04%
CF Industries Holdings Inc. (CF) $92.40 -2.03%
Clorox Co. (CLX) $134.25 -2.01%
Expedia Group Inc. (EXPE) $131.15 -1.65%
Whirlpool Corp. (WHR) $173.15 -1.50%
Amazon.Com Inc. (AMZN) $123.00 -1.43%

Nasdaq 100 - Risers

Take-Two Interactive Software Inc. (TTWO) $131.65 3.67%
Illumina Inc. (ILMN) $233.05 2.86%
Biomarin Pharmaceutical Inc. (BMRN) $78.20 2.79%
Mercadolibre Inc. (MELI) $824.68 2.57%
Intuitive Surgical Inc. (ISRG) $221.95 2.55%
JD.com, Inc. (JD) $61.74 2.54%
Baidu Inc. (BIDU) $150.58 2.44%
American Airlines Group (AAL) $16.69 2.39%
Seagate Technology Plc (STX) $84.45 2.36%
Trip.com Group Limited (TCOM) $23.31 2.33%

Nasdaq 100 - Fallers

J.B. Hunt Transport Services Inc. (JBHT) $176.57 -2.49%
Expedia Group Inc. (EXPE) $131.15 -1.65%
Qurate Retail Inc. (QRTEA) $3.76 -1.57%
Amazon.Com Inc. (AMZN) $123.00 -1.43%
Dish Network Corp. (DISH) $21.28 -1.12%
Ross Stores Inc. (ROST) $80.51 -1.01%
Walgreens Boots Alliance, Inc. (WBA) $43.00 -0.90%
Booking Holdings Inc. (BKNG) $2,326.73 -0.88%
Autodesk Inc. (ADSK) $207.17 -0.69%
Citrix Systems Inc. (CTXS) $98.77 -0.57%