US Stocks Fall as Target, Lowe's Weigh on Consumer Stocks

New York (Aug 17)  Stocks fell further from record highs on Wednesday morning as disappointments from Target (TGT) and Lowe's (LOW) brought down the cyclical consumer sector.

The S&P 500 was down 0.3%, the Dow Jones Industrial Average fell 0.33%, and the Nasdaq slipped 0.33%.

Lowe's fell 6% after missing high estimates in its recent quarter. The DIY retailer earned $1.31 a share, below analysts' estimates of $1.42. Expectations had been high heading into the quarter as strength in the housing sector fed into demand for home-improvement products.

Target tumbled 7% after cutting its full-year outlook on weaker sales in the first half of the year. The retailer also reported a decline in same-store sales for the first time in more than two years.

The Federal Reserve will be watched Wednesday ahead of the release of the minutes from the Federal Open Market Committee's July meeting in the afternoon.

"The minutes are likely to indicate greater confidence in the labor market and domestic economic growth than in June," BNP Paribas analysts wrote in a note. "Near-term risks to the U.S. outlook from the U.K.'s Brexit vote were probably deemed to have diminished. They will probably keep open the option of a September Fed rate hike."

Stocks slid from record highs on Tuesday as worries over the next rate hike superseded joy over the four-day rally in crude oil. Slightly more hawkish commentary from New York Fed President William Dudley and Atlanta Fed President Dennis Lockhart on Tuesday increased the chances of a near-term rate hike.

Stronger economic data has also recently increased the chances of a rate hike from the Fed. The likelihood of a September rate hike currently sits at 18%, while December has much higher chances at 45%, according to CME's fed funds futures. Chances of a September rate hike sat at 12% at the end of last week.

Source: TheStreet