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Wall Street losses end streak of record highs as inflation worry weighs on market

EconomyNov 09, 2021 06:36PM ET
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© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 8, 2021. REUTERS/Brendan McDermid

By Stephen Culp

NEW YORK (Reuters) - Wall Street closed lower on Tuesday, ending a multi-day rally of consecutive record closing highs as profit-taking and worries over ongoing inflation fueled a broad sell-off.

All three major U.S. stock indexes lost ground, marking the conclusion of an eight-session streak of all-time closing highs set by the S&P 500 and the Nasdaq.

After such a run, and in the absence of market-moving catalysts, market participants appeared primed to take profits.

"We've had an incredible run, so letting some air out of the balloon is perfectly normal," said Ryan Detrick, chief market strategist at LPL Financial (NASDAQ:LPLA) in Charlotte, North Carolina.

"It's a reminder that stocks can’t go up every day," Detrick added. "We’re seeing some oversold weakness today, nothing overly concerning."

The Labor Department's producer prices (PPI) report showed inflation continues to gather heat as ongoing goods and labor supply challenges send price growth further beyond the U.S. Federal Reserve's average annual 2% inflation target.

Wednesday's CPI report will be scrutinized for clues regarding the extent to which producer prices are being passed along to the consumer, whose spending represents about 70% of the U.S. economy.

(Graphic: Inflation: https://graphics.reuters.com/USA-STOCKS/znpnekkokvl/inflation.png)

The Dow Jones Industrial Average fell 112.24 points, or 0.31%, to 36,319.98, the S&P 500 lost 16.45 points, or 0.35%, to 4,685.25 and the Nasdaq Composite dropped 95.81 points, or 0.6%, to 15,886.54.

Five of the 11 major sectors of the S&P 500 ended the session red, with consumer discretionary shedding 1.4%, the largest percentage drop. Utilities led the gainers, advancing 0.4%.

  The finish line for third-quarter earnings season is in sight, with 445 of the companies in the S&P 500 having reported. Of those, 81% have beat consensus, according to Refinitiv.

General Electric (NYSE:GE) Co surged 2.6% following the 129-year-old industrial conglomerate's announcement that it would split into three separate public companies to simplify its business.

Tesla (NASDAQ:TSLA) Inc plunged 12.0%, weighing on the consumer discretionary sector and extending its losses after Chief Executive Elon Musk's Twitter (NYSE:TWTR) poll proposing to sell a tenth of his holdings garnered a 57.9% vote in favor of the sale. This raised questions as to whether Musk violated a settlement with the U.S. Securities and Exchange Commission (SEC).

Online retail stock-trading app Robinhood Markets Inc (NASDAQ:HOOD) reported a security breach affecting about 5 million customers, sending its shares sliding dropped 3.4%.

On the plus side, upbeat quarterly results sent video game maker Zynga (NASDAQ:ZNGA) Inc jumping 9.4% and shares of homebuilder D.R. Horton up 5.2%.

Declining issues outnumbered advancing ones on the NYSE by a 1.13-to-1 ratio; on Nasdaq, a 1.40-to-1 ratio favored decliners.

The S&P 500 posted 34 new 52-week highs and two new lows; the Nasdaq Composite recorded 120 new highs and 73 new lows.

Volume on U.S. exchanges was 11.02 billion shares, compared with the 10.76 billion average over the last 20 trading days.

Wall Street losses end streak of record highs as inflation worry weighs on market
 

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Comments (4)
Antonio Velardo
Antonio Velardo Nov 09, 2021 3:04PM ET
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Vix not going up much. Not many are shorting the market. It’s more profit taking.
jason xx
jason xx Nov 09, 2021 2:53PM ET
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How has it ended when market hasn't closed yet?
Stan Smith
Stan Smith Nov 09, 2021 1:47PM ET
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Takes a breather???...lol. Wall St is starting to price in tapering. Soon the markets will be gasping..lol
Stan Smith
Stan Smith Nov 09, 2021 1:47PM ET
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Plus the "inflation is transitory" lie is being exposed more and more each passing day
Ronald Warren
Ronald Warren Nov 09, 2021 1:47PM ET
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I just drove through McDonald's. $2.59 for medium fry. Who'da thought? Got to thinking that crazy inflation isn't bad for business, just the consumer. If a restaurant lost 25% of it's business, but boosted prices by 30%, they could report an increase in gross revenue.
Jw William
Jw William Nov 09, 2021 1:47PM ET
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Ronald Warren lol...cooking the books.
Ronald Warren
Ronald Warren Nov 09, 2021 12:40PM ET
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Powell knows he's being replaced now. He also knows that he can't leave bond purchases where they are. Markets are high enough now that they can take a hit. Wait and see.
 
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