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S&P 500 and Nasdaq end down after hitting record highs

Stock MarketsJul 13, 2021 07:30PM ET
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© Reuters. FILE PHOTO: The New York Stock Exchange is pictured in the Manhattan borough of New York City, New York, U.S., April 16, 2021. REUTERS/Carlo Allegri/File Photo

By Noel Randewich and Devik Jain

(Reuters) - The S&P 500 and Nasdaq ended lower on Tuesday after hitting record highs earlier in the session, with investors digesting a jump in consumer prices in June and earnings from JPMorgan and Goldman Sachs that kicked off the quarterly reporting season.

The S&P 500 and Nasdaq reached fresh record highs but quickly fell into negative territory after an auction of 30-year Treasuries showed less demand than some investors expected and pushed yields higher.

Data indicated U.S. consumer prices rose by the most in 13 years last month, while so-called core consumer prices surged 4.5% year over year, the largest rise since November 1991.

Economists viewed the price surge, driven by travel-rated services and used automobiles, as mostly temporary, aligning with Federal Reserve Chair Jerome Powell's long-standing views.

"Any time you get an uptick in interest rates the stock market is going to get nervous, especially on a day like today," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

The S&P 500 growth index dipped 0.05%, while the value index fell 0.70%.

"With growth outperforming value, the takeaway is clearly that inflation from a market perspective is not a real threat in the long term," said Keith Buchanan, a portfolio manager at GLOBALT Investments in Atlanta, Georgia.

Ten of the 11 major S&P 500 sector indexes ended lower, with real estate, consumer discretionary and financials each down more than 1%.

JPMorgan Chase & Co (NYSE:JPM) stock fell 1.5% after the company reported blockbuster quarterly profit growth but warned that the sunny outlook would not make for blockbuster revenues in the short term due to low interest rates.

Goldman Sachs Group Inc (NYSE:GS) dipped 1.2% after its quarterly earnings exceeded forecasts.

Citigroup (NYSE:C), Wells Fargo (NYSE:WFC) & Co and Bank of America (NYSE:BAC) were due to report their quarterly results early on Wednesday.

PepsiCo (NASDAQ:PEP) Inc gained 2.3% after raising its full-year earnings forecast, betting on accelerating demand as COVID-19 restrictions continue to ease.

June-quarter earnings per share for S&P 500 companies are expected to rise 66%, according to Refinitiv data, with investors questioning how long Wall Street's rally would last after a 16% rise in the benchmark index so far this year.

All eyes now turn to Fed Chair Jerome Powell's congressional testimony on Wednesday and Thursday for his comments about rising price pressures and monetary support going forward.

The Dow Jones Industrial Average fell 0.31% to end at 34,888.79 points, while the S&P 500 lost 0.35% to 4,369.21.

The Nasdaq Composite dropped 0.38% to 14,677.65.

Conagra Brands (NYSE:CAG) Inc dropped 5.4% after the packaged foods company warned that higher raw material and ingredient costs would take a bigger bite out of its profit this year than previously estimated.

Boeing (NYSE:BA) Co fell 4.2% after the Federal Aviation Administration said late on Monday some undelivered 787 Dreamliners have a new manufacturing quality issue.

Declining issues outnumbered advancing ones on the NYSE by a 2.85-to-1 ratio; on Nasdaq, a 3.06-to-1 ratio favored decliners.

The S&P 500 posted 39 new 52-week highs and no new lows; the Nasdaq Composite recorded 61 new highs and 73 new lows.

Volume on U.S. exchanges was 9.5 billion shares, compared with the 10.5 billion average for the full session over the last 20 trading days.

S&P 500 and Nasdaq end down after hitting record highs
 

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Comments (1)
Greg Mako
Greg Mako Jul 13, 2021 9:03AM ET
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Dam it! How is that possible? I only paid 10 bucks for a loaf of bread while visiting my daughter in London Ontario (not kidding. Bought it in the fancy French bakery).
Me comment
Me comment Jul 13, 2021 9:03AM ET
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So what does your comment have to do with economics in the US?
Jouni Matero
Jouni Jul 13, 2021 9:03AM ET
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Perhaps it has a lot to do with inflation which perhaps has something to do with US economy? Not sure tho...
surya putera
surya putera Jul 13, 2021 9:03AM ET
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simple, dont go to fancy ones. coke in vending machines are more expensive compared to supermarkets, but way cheaper if you go to fancy bars or restaurant. go figure
 
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