The S&P 500 index shed 0.7% last week, led by the consumer discretionary sector as a number of retailers released weaker-than-expected quarterly results and cut their forecasts.
The decline erased only part of the previous week’s 5.9% jump; the S&P 500 is still up 2.4% for November to date. Nevertheless, the S&P 500 is solidly in the red for 2022 thus far with a year-to-date drop of 17%.
The weekly decline came as some retail companies including Target (TGT) reported quarterly earnings below analysts’ expectations and lowered guidance. The week’s drop also reflects a paring of the excitement over slower-than-expected inflation that fueled last week’s rally.
Among the S&P 500’s sectors, the consumer discretionary sector had the largest percentage drop last week, sliding 3.1%, followed by a 2.4% drop in energy, a 1.8% decline in real estate and a 1.6% slip in materials.
However, three sectors managed to post gains: Consumer staples rose 1.7%, followed by a 1% increase in health care and a 0.8% rise in utilities.
This week, inflation will continue to be a focal point as inflation expectations from the New York Fed are expected on Monday. Retail sales for October are due Wednesday while October building permits and housing starts are also due Wednesday. Investors will get another reading on real estate on Friday, when existing home sales for October will be released.
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