Nov 16 (Reuters) - U.S. stock indexes were set to open lower on Wednesday after top retailer Target's dour holiday forecast stoked fears of inflation hurting a crucial business season for retailers.
Target Corp (TGT.N) fell 15.6% in premarket trading, and dragged along with it shares of other big U.S. retailers such as Walmart Inc (WMT.N), Macy's Inc (M.N) and Costco Wholesale Corp (COST.O). They were down between 0.9% and 1.8%.
"Overall, it's showing that there's some weakness in the economy with the consumer. We are a consumption-based economy, so you never want to see that," said Thomas Hayes, managing member at Great Hill Capital LLC in New York.
Despite the sales warning from Target, latest data on U.S. retail sales suggested that consumer spending remained stable and could help to underpin the economy in the fourth quarter.
The data showed retail sales rose 1.3% last month after remaining flat in September. Economists polled by Reuters had forecast sales accelerating 1%.
"When you see a beat like this, it suggests that the Fed might interpret it as they need to do more as far as rate hikes, perhaps going a bit higher than what we had originally penciled in," said Brian Jacobsen, senior investment strategist at Allspring Global Investments.
The data and earnings reports come on the heels of upbeat quarterly results from Walmart Inc (WMT.N) on Tuesday that had added to market optimism driven by a softer-than-expected producer prices report.
All the three main indexes ended higher in the previous session on hopes that the improved inflation outlook would allow the U.S. Federal Reserve to take a less aggressive approach on interest rate hikes, overshadowing geopolitical worries.
At 8:58 a.m. ET, Dow e-minis were down 57 points, or 0.17%, S&P 500 e-minis were down 14.25 points, or 0.36%, and Nasdaq 100 e-minis were down 71 points, or 0.6%.
Home improvement retailer Lowe's Companies Inc (LOW.N) jumped 1.8% after increasing its annual profit forecast on steady demand.
Auto parts retailer Advance Auto Parts Inc (AAP.N) slumped 15.6% after lowering its earnings-per-share forecast.
