Updated from 7:36 a.m. ET, Wednesday, Aug. 16.
Dow Jones Industrial Average futures were up 0.2%, S&P 500 futures gained 0.15% and Nasdaq futures added 0.18%.
Target added nearly 5% before the bell on better-than-expected earnings and a sunny outlook. Net income rose to $1.22 a share over its quarter ended July 29, higher than $1.16 a share a year earlier. Adjusted earnings of $1.23 a share beat estimates by 4 cents.
Revenue increased 1.6% to $16.43 billion, edging out consensus by $130 million. Same-store sales gained 1.3%, smashing targets of 0.3% growth.
"We are pleased that second-quarter traffic increased more than 2%, reflecting growth in both our store and digital channels," said Brian Cornell, chairman and CEO of Target, in a statement. "We continue to focus on our long-term strategy, as we work to transform every part of our business and build an even better Target that will thrive in this new era in retail."
Target also raised its full-year adjusted earnings guidance to $4.34 to $4.54 a share, higher than a previous range of $3.80 to $4.20.
Urban Outfitters rocketed nearly 20% higher in premarket trading Wednesday after topping quarterly estimates thanks to strength in its direct-to-consumer sales.
Profit declined to 44 cents a share over its recent second quarter from 66 cents in the same period a year earlier. However, that was above analysts' estimates of 37 cents a share.
Revenue dipped 2% to $873 million, though came in higher than $862 million consensus.
Comparable retail segment sales fell 4.9%, tied to "negative retail store sales," while wholesale segment net sales increased 10%. By brand, Free People sales gained 2.9%, but fell 4% and 7.9% at Anthropologie and Urban Outfitters, respectively.
Earnings surprises from Target and Urban Outfitters are a welcome change from a string of retail disappointments on Tuesday, Aug. 15. Disappointments from Coach Inc. (COH) , Advance Auto Parts Inc. (AAP - Get Report) , and Dick's Sporting Goods Inc. (DKS - Get Report) on Tuesday pulled the S&P 500 lower for its first day in three.
Around 92% of S&P 500 companies have reported earnings so far this season. Of those, 73.7% have exceeded earnings estimates, above the historical average of 64%, according to Thomson Reuters data. More than 68% have topped revenue consensus, also above an average of 59%. Consumer discretionary and staples stocks have seen the slowest earnings growth, up 3.6% and 4.6%, respectively.
The Federal Open Market Committee will release minutes from its late July meeting on Wednesday afternoon at 2 p.m. ET. Fed members tiptoed the line between hawk and dove at its July 25-26 meeting.
The Fed left the federal funds rate at 1% to 1.25%, as widely expected. Another rate hike is not expected until at least December. Even then, chances of a year-end increase are only at 49.2%, according to CME Group fed funds futures.
The Fed also said it would implement changes to its balance sheet "relatively soon" provided the economy expands as expected. Previous language in the Fed's statement had said those changes would come this year.
The Fed currently holds $4.5 trillion in Treasuries and mortgage-related bonds on its balance sheet. Unloading those would likely tighten monetary conditions in the same way an interest rate hike would. The Fed has previously emphasized that when it plans to do so it will be a gradual process.
Housing starts for July cooled to a seasonally adjusted annual rate of 1.16 million, according to the Commerce Department, coming in 4.8% lower than in June and 5.6% below the rate a year earlier. Analysts had anticipated a stronger pace of 1.23 million. Permits also declined, down 4.1% in July.
Also on the economic calendar on Wednesday, a weekly read on crude stockpiles from the Energy Information Administration is set for its regular time at 10:30 a.m.
Political headlines this week have centered on racial violence in Charlottesville, VA, and President Trump's response, or lack thereof. A White Supremacist and Neo-Nazi rally on Saturday, Aug. 12, escalated into violence as protesters and counter-protesters clashed, culminating in an intentional hit-and-run that killed one and injured at least 19 others. James Alex Fields, Jr. has been charged with second-degree murder in the death of 32-year-old Heather Heyer.
Trump has caused outrage in his response to the tragedy, appearing reluctant to call out the White Supremacists who gathered in Charlottesville and instead blaming violence on "both sides." He doubled down on this stance in a press conference on Tuesday evening.
"You had a group on one side and you had a group on the other, and they came at each other with clubs and it was vicious and it was horrible, and it was a horrible thing to watch," the president said. "I think there's blame on both sides." He went on to ask why the "alt-left" had not been found culpable of violence.
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