What Retail Earnings Means for the Dow Jones Today

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The Dow Jones today fell 50 points out the gate as investors continue to monitor developments on the U.S.-China trade front.

But a strong earnings report from Target Corp. (NYSE: TGT) gave stocks a boost as investors prepare for a slate of quarterly reports from retail giants. Earnings season continues Tuesday with a string of high-profile retailers. Read on to see how they stack up…

Here are the numbers from Monday for the Dow, S&P 500, and Nasdaq:

Index Previous Close Point Change Percentage Change
Dow Jones 25,819.65 -206.67 -0.79%
S&P 500 2,792.81 -10.88 -0.39%
Nasdaq 7,577.57 -17.79 -0.23%

Now, here’s a closer look at today’s Money Morning insight, the most important market events, and stocks to watch.

The Top Stock Market Stories for Tuesday

  • Despite some progress in trade talks between the United States and China, China warned its citizens about trouble ahead for its economy. This morning, the Chinese government predicted the nation’s economy would grow between a rate of 6% and 6.5% in the year ahead. This figure would represent a slowdown from last year’s expansion rate of 6.6% and would be the lowest growth total in 30 years. Ongoing tensions between the United States and China have cooled in recent weeks. U.S. President Donald Trump said that the two nations are “very, very close” to a deal and a “signing summit.”
  • Health insurance companies are under pressure after the U.S. House of Representatives unveiled a “Medicare for all” bill. Although the bill has very little chance of passing in the current session of Congress, investors are unnerved about the growing desire in Washington to shift to a single-payer model. Although there might be an opportunity for companies like Cigna Corp. (NYSE: CI) and UnitedHealth Group Inc. (NYSE: UNH) to rebound, don’t expect the gains to last long. Many analysts feel that health insurance stocks are ripe for a sharp downturn when Democratic nominees for president begin debating their healthcare positions in the fall.
  • Shares of Tesla Inc. (NASDAQ: TSLA) are falling again in pre-market hours. The latest bad news came after the company received another downgrade – this one from Barclays Plc. (NYSE: BCS). The British bank slashed its price target from $210 to $192 per share and said that the company has undermined its own narrative around the Model 3. “With lower margins not likely to be offset by increased volumes and cost saves, we cut our PT to $192 and remain underweight…” the bank wrote. The price target of $192 represents downside of 32.7% from Tuesday’s closing price.

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Stocks to Watch Today: TGT, CRM, FB

  • This morning, shares of Target Corp. (NYSE: TGT) popped nearly 6% after a strong Q4 earnings report. The company reported earnings per share of $1.53 on total revenue of $22.98 billion. Wall Street expected $1.52 per share on sales of $22.91 billion. The firm reported very strong online sales (up 25%) and a 5.3% jump in same-store sales. Analysts had expected a 4.5% increase in same-store sales. The report is the latest sign that Target has emerged as a formidable competitor to Amazon.com Inc. (NASDAQ: AMZN) and Walmart Inc. (NYSE: WMT).
  • Facebook Inc. (NASDAQ: FB) is under fire again due to security concerns around its sign-in features. The company has not allowed users to opt out of the key feature that lets users look up others by phone number and e-mail address. Many people have added their phone numbers in the past thinking it would only be used for two-factor authentication and security. Critics argue this is the latest episode of Facebook compromising user information.
  • Shares of Salesforce.com Inc. (NYSE: CRM) are in focus as the cloud computing giant plans to report earnings after the bell Tuesday. CRM stock is already up 20% so far this year. And many analysts expect the firm to report earnings per share of $0.55 on top of $3.56 billion in revenue. Yesterday, Salesforce co-CEO Marc Benioff predicted that $30 billion in annual revenue for the cloud computing giant is “right around the corner.”
  • Look for earnings reports from AeroVironment Inc. (NASDAQ: AVAV), Ambarella Inc. (NASDAQ: AMBA), Ciena Corp. (NASDAQ: CIEN), Kohl’s Corp. (NYSE: KSS), Ross Stores Inc. (NASDAQ: ROST), Sina Corp. (NASDAQ: SINA), Urban Outfitters Inc. (NASDAQ: URBN), Vivint Solar Inc. (NASDAQ: VSLR), and Weibo Corp. (NYSE: WB).

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