Stocks rise for second straight day despite target earnings warning

U.S. stocks advanced to end a turbulent session higher on Tuesday after investors shrugged off a Target earnings warning that weighed on broader markets in earlier trading.

The S&P 500 rose about 1% and the Dow Jones Industrial Average gained 264 points, or 0.8%. The tech-heavy Nasdaq rose about 0.9%. The indices climbed after struggling for direction for much of the day. Meanwhile, the benchmark 10-year US Treasury fell back to dive below 3%.

Target (TGT) was the center of attention in morning trading after the retailer slashed its forecast and said it aimed to reduce excess inventory by offering discounts, canceling orders and reassessing spending – an announcement that comes just weeks after the company shocked investors with a dramatic loss in earnings that sent shares tumbling 25%.

Target stock closed down 2.3%. The warning also weighed on other retail peers as a growing number of companies sound the alarm over the cost of inflation and supply chain imbalances on their margins. Shares of Walmart (WMT) fell 1.2% and Costco (COST) closed just below the flat level.

Elsewhere in the markets, oil rose above $120 a barrel, giving the energy sector a boost. Shares of Exxon (XOM) rose 4.6%, marking the oil conglomerate’s biggest intraday gain after analysts at Goldman Sachs and Credit Suisse raised price targets for the company. The stock topped $100 for the first time since 2014.

Kohl’s (KSS) was also in the spotlight after Vitamin Shoppe owner Franchise Group was in talks to buy the retailer for $8 billion. Shares of Kohls jumped nearly 10%.

Tuesday’s choppy trading builds on a series of back-and-forth sessions as investors assess the economic outlook and brace for central bank policymakers to raise interest rates in a bid to calm inflation.

“Watching the market, actually quite calm, as it vacillates back and forth suggests that until there is a more definitive reading on the inflation front coupled with Fed thinking on further rate hikes in September, we can expect that rebound and onward,” said Quincy Krosby, chief equity strategist at LPL Financial, in a note.

All three major indices closed in the green on Monday, albeit off session highs after faltering after an early morning rally. The S&P 500 closed 0.3% higher after falling after jumping more than 1%, the Dow Jones erased a 300-point gain to end just above breakeven, and the Nasdaq climbed by 0.4%.

“For now, the market is seeing a Federal Reserve trying to navigate a painful and bumpy road, while trying to find a smooth exit,” Krosby said. “And the market finds itself between wanting to believe in rallies but not believing that the Fed can negotiate a soft landing.”

Inflation is a priority for investors this week, with the May Consumer Price Index (CPI) from the Bureau of Labor Statistics due out on Friday. Wall Street will be looking for signs that prices have peaked as it hopes for a break in monetary tightening over the fall months.

Outside of Friday’s CPI print, investors face a lighter economic calendar and earnings this week.

4:00 p.m. ET: Stocks post second straight day of gains after turbulent trading

Here’s where the S&P 500, Dow and Nasdaq stopped trading after the market closed:

  • S&P 500 (^GSPC): +39.11 (+0.95%) to 4,160.54

  • Dow (^ DJI): +264.03 (+0.80%) to 33,179.81

  • Nasdaq (^IXIC): +113.86 (+0.94%) at 12,175.23

  • Raw (CL=F): +$1.49 (+1.26%) at $119.99 per barrel

  • Gold (CG=F): +$12.30 (+0.67%) to $1,856.00 per ounce

  • 10-year cash flow (^TNX): -6.6 bps for a yield of 2.9720%

10:38 a.m. ET: S&P, Dow and Nasdaq turn around after morning losses

Here are the top moves in the markets as of 10:38 a.m. ET:

  • S&P 500 (^GSPC): +10.00 (+0.24%) to 4,131.43

  • Dow (^ DJI): +27.67 (+0.08%) to 32,943.45

  • Nasdaq (^IXIC): +51.19 (+0.42%) to 12,112.56

  • Raw (CL=F): +$1.23 (+1.04%) at $119.73 per barrel

  • Gold (CG=F): +$7.30 (+0.40%) at $1,851.00 per ounce

  • 10-year cash flow (^TNX): -5.3 bps for a yield of 2.9850%

9:30 a.m. ET: Stocks tumble as Target’s dwindling outlook weighs on markets

Here is where the major indexes opened at the start of Tuesday’s session:

  • S&P 500 (^GSPC): -34.69 (-0.84%) to 4,086.74

  • Dow (^ DJI): -230.58 (-0.70%) to 32,685.20

  • Nasdaq (^IXIC): -140.86 (-1.17%) to 11,920.51

  • Raw (CL=F): S$settlement date at $N/A per barrel

  • Gold (CG=F): +$1.20 (+0.07%) to $1,844.90 per ounce

  • 10-year cash flow (^TNX): -3.5 bps for a yield of 3.0030%

7:30 a.m. ET: Stock futures fall as Target issues profit warning

Here are the main developments in futures trading ahead of Tuesday’s open:

  • S&P 500 Futures Contracts (ES=F): -36.75 (-0.89%) to 4,083.75

  • Dow futures (JM=F): -259.00 (-0.79%) to 32,653.00

  • Nasdaq futures contracts (NQ=F): -142.50 (-1.13%) to 12,462.50

  • Raw (CL=F): -0.61$ (-0.51%) to 117.89$

  • Gold (CG=F): +$9.70 (+0.53%) at $1,853.40 per ounce

  • 10-year cash flow (^TNX): +8.1 bps for a yield of 3.0380%

A specialist trader works inside a booth on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 3, 2022. REUTERS/Brendan McDermid

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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