In the meantime, more companies are joining a parade to deliver what looks to be the best growth in profit for S&P 500 companies since late 2021.
Target jumped 15.4% after the retailer said an important underlying measure of sales strength for the spring came in at the high end of its expectations, as traffic increased at both its stores and online. Its profit topped analysts’ estimates, and it raised its forecast for the full year.
TJX, the company behind TJ Maxx and Marshalls, rose 4.5% after it likewise reported stronger profit for the latest quarter than expected. The retailer also raised its profit forecast for the full year and said it saw increased customer transactions at all of its divisions.
They helped offset a 12% drop for Macy’s. The company reported better profit than analysts expected, but its revenue fell short of forecasts. It also lowered its expected range for sales this year, due in part to “a more discriminating consumer.”
Worries have been growing about whether U.S. shoppers can keep up their spending and keep the slowing economyout of a recession. Inflation is slowing, but prices are still much higher than before the pandemic, and many U.S. households have burned through the savings they built up during that stay-at-home period.
Concerns have been particularly high for U.S. households at the lower end of the income spectrum. High interest rates instituted by the Federal Reserve have made it more expensive to borrow money, compounding the difficulty.
That’s why the widespread expectation is for the Fed next month to lower its main interest rate for the first time since the COVID crash of 2020. The only question is how much and how quickly it will move.
The yield on the 10-year Treasury has been sinking since April on such expectations. It slipped further Wednesday, down to 3.79% from 3.81% late Tuesday.
On Wall Street, coal companies Arch Resources and Consol Energy both jumped after they said they were combining in an all-stock “merger of equals.” After merging, they plan to go by a new name, Core Natural Resources. Arch Resources climbed 5.9%, and Consol Energy gained 6%.
In stock markets abroad, indexes were mixed. Japan’s Nikkei 225 slipped 0.3%. It was a much more modest move than some of its huge swings in recent weeks, including its worst day since the Black Monday crash of 1987.
Indexes were mixed elsewhere in Asia and modestly higher in Europe.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.
