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Wall Street Opens Mostly Lower as Rally Runs Out of Steam; Dow Down 250 Pts

Stock MarketsMay 04, 2021 09:59AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. stock markets opened mostly lower again on Tuesday, amid fresh concerns that stocks may have advanced too far, too fast.

By 10 AM ET (1400 GMT), the Dow Jones Industrial Average was down 250 points, or 0.7%, while the Nasdaq Composite was down 1.9%. The S&P 500 was outperforming with a gain of 0.3%.

The market was unsettled by comments from JPMorgan (NYSE:JPM) Chief Executive Jamie Dimon at a Wall Street Journal event saying that a return of inflation is likely, given that pent-up demand will be released into the economy just as the government is ramping up spending to force the pace of recovery.

Fears about inflation have been largely quiescent for the last couple of weeks, after an effective barrage of communications from the Federal Reserve promising not to reduce monetary stimulus for some time yet. However, surging commodity prices and input prices for manufacturers are starting to force another rethink.

Michael Antonelli, a market strategist at RW Baird, said via Twitter that the market is likely “as good as it gets” right now, given fresh memories of a strong earnings season and economic data that are flattered by extraordinarily weak year-ago numbers.

“I’m not a “sell in May” guy but summer can be a choppy period for markets especially when we’re all outdoors living a Roaring 20s,” Antonelli said.  

Pfizer (NYSE:PFE) stock bucked the trend, rising over 3% as it revised its profit guidance for the year substantially higher due to the expected performance of its Covid-19 vaccine, developed jointly with BioNTech. CVS Health (NYSE:CVS) also gained, as the pharmacy chain reported a strong first quarter in which demand for Covid-19 testing more than offset the effects of a 'weak' season for cold and flu medicines due to social distancing.

However, tech stocks sold off broadly, as doubts about their ability to continue growing earnings bubbled to the surface. Old-economy stocks too came under pressure - handy earnings beats weren't enough to stop  ConocoPhillips (NYSE:COP) and Dupont (NYSE:DD) stock both falling over 1.2%.

“Longer-term expectations appear overly optimistic,” analysts at Oxford Economics said in a note to clients. “The bottom-up consensus points to an ongoing profit margin expansion over the next few years and we think this is unlikely against a backdrop of rising cost pressures and proposals for higher corporate tax rates.”

Wall Street Opens Mostly Lower as Rally Runs Out of Steam; Dow Down 250 Pts
 

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Comments (9)
Jon Bal
Jon Bal May 04, 2021 11:14AM ET
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maybe higher cost are finally starting to show up on the income statements
William Bailey
William Bailey May 04, 2021 11:10AM ET
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Like I said recently .... math does not support the market going much higher without massive printing of at keast 5-6 trillion by the Fed and most would need to go to markets !! As soon as latest stim is burned off the Fed’s paultry 1.3 t a year wont stop tbe collapse . All the goid data and hyped up news in the world aint gonna stop the collapse
Alfie Brock
Alfie Brock May 04, 2021 11:04AM ET
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"mostly" lower LMAO
Leonowens Leo
Leonowens Leo May 04, 2021 11:03AM ET
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cam mana ya
Leonowens Leo
Leonowens Leo May 04, 2021 11:02AM ET
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cam mana ya
Franco Dominguez
Franco Dominguez May 04, 2021 10:48AM ET
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powell lies, now the real world is falling
Vlad Lozovskiy
Vlad Lozovskiy May 04, 2021 10:30AM ET
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Mostly lower.  Lol.  We are having a disaster today, they call it "mostly lower"
MD SABIHA KHAN
MD SABIHA KHAN May 04, 2021 10:20AM ET
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USD trillion 210
nica torres
nica torres May 04, 2021 10:18AM ET
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How to start to do invest
 
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