By Geoffrey Smith
Investing.com -- U.S. stock markets turned lower after a mixed opening on Wednesday, as gloomy comments on the economic outlook from Federal Reserve officials and a backdrop of rising coronavirus infections overshadowed strong numbers by sports gear maker Nike (NYSE:NKE).
Nike published a blowout quarterly update after the close on Tuesday, pushing its stock up 9%. But the Dow Jones Industrial Average only just clung on to the gain line, despite the equivalent of a 100-point boost by Nike. By 10:15 AM ET (1415 GMT) it was up only 15 points, or less than 0.1% at 27,303 points by 9:35 AM ET (1335 GMT). The S&P 500 was down 0.4% while the Nasdaq Composite fell 0.9%.
The Nasdaq was again held back by underperformance in Tesla (NASDAQ:TSLA) stock, which fell 6.5% in disappointment at the company's much-hyped 'Battery Day' presentation on Tuesday. The stock had already dropped over 5.5% on Tuesday in response to founder Elon Musk's tempering of expectations ahead of the event. Analysts at Deutsche Bank (DE:DBKGn) nonetheless raised their recommendation to 'buy' with a price target of $500, some 25% above current levels.
Before the market open, Cleveland Fed President Loretta Mester had made some downbeat comments about the state of the economy, saying that the recovery was neither broad-based nor sustainable, and that "very accommodative" monetary policy and fiscal support would be necessary for some time. While the first of those conditions is in place, there is still no sign of a compromise on Capitol Hill on a new round of support measures, despite signs from the labor market that lay-offs continue to run at a high rate and that nearly 30 million Americans are either out of work or underemployed.
Fed vice-chairman Richard Clarida, meanwhile, had earlier rebutted suggestions on Tuesday by the Chicago Fed's Charles Evans that the central bank could raise interest rates again before the annual inflation rate got back to 2%. He too stressed that further fiscal support was necessary for the economy.
Elsewhere, Peloton Interactive (NASDAQ:PTON) stock rose 4.5% to a new record high and Amazon (NASDAQ:AMZN) stock fell 0.9% after reports that the e-commerce giant had ordered Echelon Fitness to stop styling its budget $500 exercise bikes "Prime" and suppressed Echelon's claims to a partnership with the Amazon Prime service.
Peloton stock had fallen sharply on Tuesday on the perception that Amazon was set to undercut it with Echelon's product. The episode comes against of increased antitrust scrutiny of Amazon's business model.
Another stock to hit an all-time high was Zoom Video (NASDAQ:ZM), which gained 3.3% against a backdrop of rising Covid-19 cases and tighter social distancing measures in Europe, which seem likely to sustain high interest in its video-conferencing services for the foreseeable future. U.K. Prime Minister Boris Johnson had told parliament on Tuesday he expects the new tighter controls to last at least six months.