The Nasdaq composite led the downside on Wednesday afternoon while the Dow Jones fluttered between small gains and small losses, but ultimately closed lower. Strong retail sales data failed to support stocks after a major earnings miss from retailer Target, which fell more than 13%.
Dow Jones Today: Retail Sales Data In Focus
The Dow Jones Industrial Average closed about 0.1% lower after whipsawing through the morning session. The Nasdaq struggled with a loss of 1.5%, which deepened a bit into the close. Elsewhere, the S&P 500 shed 0.8% as the small-cap Russell 2000 led the downside with a 1.9% decline.
Volume was slightly higher on the Nasdaq and lower on the NYSE vs. the close on Tuesday, according to early data.
The stock market rally paused after last week's strong upside. Positive economic data spurred those gains, including better-than-expected CPI and PPI data.
Retail sales jumped 1.3% in October, ahead of expectations for a 1% rise.
The bullish data has investors on edge, in an environment in which good news is bad for stock market prices. Robust spending could serve as a signal to Fed policymakers to aggressively hike rates.
No Bull's-Eye For Target Earnings
Outside the Dow Jones, Target posted disappointing earnings, dropping the stock over 13%. Shares were off their lows of the day though. TGT stock is now below key support at its 50-day moving average.
Q3 earnings missed by a wide margin while weak guidance for the holiday quarter added to selling pressure. CEO Brian Cornell noted that consumer shopping behavior was very much impacted by inflation, rising interest rates and economic uncertainty.
TJX also reported earnings early Wednesday. The retailer scored a breakout following a mixed report in which earnings rose 2% to 86 cents per share, following Q2's 13% decline. However, revenue slid 2.9% to $12.17 billion, below expectations.
Q3 revenue grew 3% at the Marmaxx division while falling 14% at HomeGoods.
Marmaxx — which includes popular chains like T.J. Maxx, Marshalls and Sierra — is the company's biggest revenue segment.
TJX scored a breakout from a 77.45 cup-base entry as the stock moved up in strong volume and the RS line hit a new high.
Nvidia Reports Q3 Results
Nvidia reports Q3 earnings after Wednesday's closing bell, with analysts expecting a profit of just 70 cents per share on $5.82 billion in revenue. If met, earnings will mark a 40% decline compared to the same quarter last year. Revenue is also expected to fall 18%.
Both Nvidia and rival Advanced Micro Devices have warned about a "massive decline" in gaming revenue this year. In addition, the crypto crash has impacted Nvidia sales because its graphics cards are used to mine digital assets.
However, the chipmaker's automotive efforts are paying dividends, with their chips gaining popularity in autonomous driving vehicles.
NVDA stock is down 46% so far in 2022.
Outside Dow Jones: IBD 50 Stocks To Watch
The majority of IBD 50 stocks traded lower on Wednesday while a few solar energy components traded higher. Shoals Tech and Enphase Energy led the upside among IBD 50 stocks.
The solar energy industry group ranks a strong No. 5 of IBD's 197 groups, showing solid market leadership. Shoals was trading inside the 5% buy zone and was actionable from a 28.57 buy point earlier in today's session. But the solar stock faded slightly in afternoon trading and is back below the proper entry. Shares broke out earlier this week after the Q3 earnings release.
Enphase stock is trading just 3% below a 316.97 cup-with-handle buy point. Shares rose over 1.7% Wednesday afternoon.
Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.
