U.S. stocks edged higher late Tuesday, with the Dow up 100 points. The market appeared to shake off Target’s earnings warning. U.S. Treasury Secretary Yellen said the U.S. is facing an “unacceptable level of inflation” challenge.
The Dow rose 100.80 points, or 0.31%, to 33016.58; the Nasdaq rose 51.34 points, or 0.43%, to 12112.72; the S&P 500 rose 16.71 points, or 0.41%, to 4138.14.
U.S. oil and gas stocks generally rose on Tuesday morning. Exxon Mobil (103.37, 4.53, 4.58%) rose 3%, BP (34.19, 1.09, 3.29%) rose 2%, Marathon Oil, ConocoPhillips (122.71, 5.33, 4.54%) rose about 1.8%, Mexico Philippine Petroleum (45.32, 1.91, 4.40%) rose 1.66% and Chevron (180.2, 3.37, 1.91%) rose 1%.
Retailers are in the spotlight. Target, the No. 2 U.S. department store retailer, announced plans to reduce excess inventory, said it would implement additional markdowns on products and cancel some orders. Target also slashed its operating margin guidance for the quarter.
Affected by Target’s warning, shares of retailers such as Walmart (123.37, -1.50, -1.20%) followed suit.
U.S. stock market earnings were sparse this week. Wholesale food company United Natural Foods reported third-quarter results that beat expectations. Another food stock, J.M. Smucker, came under downward pressure after its quarterly report.
Ed Yardeni, president of Yardeni Research, said: “From the perspective of stock valuation multiples, U.S. stocks have been at high levels since the beginning of the year. To a large extent, in hindsight, the U.S. stock market is clearly overvalued.”
The market is worried that the Fed’s aggressive monetary tightening stance will lead to a recession. Risk aversion has increased, and market volatility has continued to increase.
Rising bond yields have heightened concerns about risks to economic growth as central banks gradually tighten policy. Benchmark U.S. Treasury yields held steady near 3 percent, a psychological threshold that could weigh on new Treasury bills maturing this week ahead of key inflation data.