Target’s stock soared more than 20% to a record $103 a share on Wednesday after the retailer reported a 17% jump in second-quarter profit, higher sales and a sunnier full-year outlook as its big investments in same-day delivery and in-store pickup services drew more customers.
The retailer and some of its big competitors like Walmart are standouts in what’s shaped up to be a lackluster earnings season for U.S. companies on the whole. The S&P 500, with more than 94% of its companies reporting the most-recent quarterly earnings, is on track for a ho-hum 1.2% increase in quarterly profits from a year earlier, according to data compiled by Refinitiv as of Wednesday afternoon. Sales at the 500 largest publicly traded U.S. companies rose by an average of 4.7% in the last quarter, the slowest growth rate since the third quarter of 2016.
The performance is unwelcome news at a time of stock market volatility and when forecasters are trimming economic growth outlooks, trade tensions are intensifying and driving up the cost of imported goods and economists are scratching their heads to figure out if we are headed for recession.
“We’ve reached a very high plateau, but it is a plateau,” said David Kelly, chief global market strategist at J.P. Morgan Asset Management. “The economy is slowing.”
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