Target Drops 5.2% After Boycotts Hit Revenue

Wall Street slumped on Wednesday under the weight of pressure from the bond market, where Treasury yields climbed on worries about the US government's spiraling debt and other concerns.

• The S&P fell 95.85 points, or 1.6%, to 5,844.61 for a second straight drop after breaking a six-day winning streak.
• The Dow Jones Industrial Average fell 816.80 points, or 1.9%, to 41,860.44.
• The Nasdaq composite sank dropped 270.07 points, or 1.4%, to 18,872.64.

Stocks had been drifting only modestly lower earlier in the day, after Target and other retailers gave mixed forecasts for their upcoming profits. The market then turned sharply lower after the US government released the results for its latest auction of 20-year bonds, the AP reports. That helped send Treasury yields jumping.

The government regularly sells such bonds, which is how it borrows money to pay its bills. In this auction, the US government had to pay a yield as high as 5.047% to attract enough buyers to lend it a total of $16 billion over 20 years. That helped push up yields for all kinds of other Treasurys, including the more widely followed 10-year Treasury. Its yield climbed to 4.59% from 4.48% late Tuesday and from just 4.01% early last month. That's a notable move in the bond market. Yields have been on the rise in part because of concerns that tax cuts currently under consideration in Washington could pile trillions of more dollars onto the US government's debt.

• Target sank 5.2% after the retailer reported weaker profit and revenue than analysts expected for the start of the year. The company said it felt some pain from boycotts by customers. It scaled back many diversity, equity, and inclusion initiatives earlier this year following criticism from the White House and conservative activists, which drew its own backlash. Perhaps more worryingly for Wall Street, Target also cut its forecast for profit over the full year.
• Carter's, which sells apparel for babies and young children, sank 12.6% after cutting its dividend. New CEO Doug Palladini said the company made the move in part because of investments it anticipates making in upcoming years, as well as the possibility that it "may incur significantly higher product costs as the result of the new proposed tariffs on products imported into the United States."

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