The US markets ended deeply in red with Target losing around a quarter of its stock market value and highlighting worries about the US economy after the retailer became the latest victim of surging prices. Retail stocks helped lead the markets lower on the day, with the Dow Jones US Retail Index plunging by 7.7 percent to its lowest closing level in almost two years. Target (TGT) posted a particularly steep loss after the discount retailer reported quarterly earnings that missed street estimates. Meanwhile, Substantial weakness was also visible among transportation stocks, as reflected by the 7.4 percent nosedive by the Dow Jones Transportation Average. Housing stocks also saw significant weakness on the day, dragging the Philadelphia Housing Sector Index down by 4.6 percent.
On the economic data front, a report released by the Commerce Department showed a modest decrease in new residential construction in the month of April. The Commerce Department said housing starts edged down by 0.2 percent to an annual rate of 1.724 million from a revised rate of 1.728 million in March. The slight drop in housing starts came as single-family housing starts plunged by 7.3 percent to an annual rate of 1.100 million. Meanwhile, the report showed building permits, an indicator of future housing demand, tumbled by 3.2 percent to an annual rate of 1.819 million from a revised rate of 1.879 million in March.
Dow Jones Industrial Average fell 1,164.52 points or 3.57 percent to 31,490.07, Nasdaq dropped 566.37 points or 4.73 percent to 11,418.15 and S&P 500 was down by 165.17 points or 4.04 percent to 3,923.68.
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