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Wall Street Opens Sharply Lower as Rivian Sales Stoke Fears; Dow Down 420 Pts

Stock Markets May 09, 2022 09:37AM ET
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© Reuters

By Geoffrey Smith 

Investing.com -- U.S. stock markets opened sharply lower on Monday as fears about rising interest rates were compounded by signs of increasing stress in some technology stocks. 

By 9:35 AM ET (1335 GMT), Dow Jones futures were down 421 points, or 1.3% at 32,478 points, the S&P 500 was down 1.5%, and the Nasdaq Composite was down 1.7%.

The mood was soured by the sight of early backers of electric-van maker Rivian Automotive (NASDAQ:RIVN) - an example of the 'profitless tech' sector that has come under the most pressure from the rising interest rate environment - reducing their holdings at a steep discount. Ford Motor (NYSE:F) reportedly sold some 8 million shares while another unnamed seller, thought by most to be Amazon (NASDAQ:AMZN), planned to sell another 12 million shares, both at a discount of around 6% to Friday's closing level, according to CNBC. Ford itself fell 1.9%.

Rivian stock fell 13% to a new all-time low in the first minutes of trading and has now lost over two-thirds of its value since listing only half a year ago. Other electric vehicle stocks also suffered in sympathy, with Lucid Group (NASDAQ:LCID) stock falling 5.1% and Lordstown Motors (NASDAQ:RIDE) stock falling 10.2%, despite publishing first quarter earnings in line with consensus. Even Tesla (NASDAQ:TSLA), the only EV stock that is already consistently profitable, fell 3.8%.

Another stock to fall to an all-time low was cybersecurity and analytics company Palantir (NYSE:PLTR). Palantir missed estimates for first quarter earnings and revenue and also guided lower for the second quarter. It said its operating margin will fall to 20% in the current quarter from 31% a year earlier due to heavy investment in expanding its sales force. Palantir stock fell 22%.

Uber (NYSE:UBER) stock, meanwhile, fell to its lowest in over two years on reports that CEO Dara Khosrowshahi had warned staff of a "seismic" shift at the company to put more focus on generating free cash flow. An email reportedly sent to staff by Khosrowshahi hinted of heavy cost cuts and a further scaling back of investments that have only a long-term payoff. The stock pared its early losses to trade down 1.5%.

Tech, in particular, remains vulnerable to sharp selloffs due to fears about rising interest rates, which were not much eased by an April employment report that saw the unemployment rate falling further and the recent improvement in labor force participation reversing. That suggested that the labor market is likely to continue being a source of inflationary pressure for the foreseeable future, keeping the Federal Reserve inclined to raise interest rates in aggressive half-point increments over the next few months.

The few stocks to defy the drop included those that were able to prove they can absorb any rising input costs and pass them on to consumers. Tyson Foods (NYSE:TSN) stock rose 0.1% after the country's biggest meatpacker reported a 16% rise in revenue in the last quarter.

Wall Street Opens Sharply Lower as Rivian Sales Stoke Fears; Dow Down 420 Pts
 

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Comments (30)
Nils Hullmann
Nils Hullmann May 10, 2022 12:46AM ET
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a company with 500 car sales did this ? you can't be serious
Istvan Nagy
Istvan Nagy May 10, 2022 12:44AM ET
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Hahahaha change profession dude!
Marco cuevas
Marco cuevas May 09, 2022 6:10PM ET
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Rivian? LMAO
Mike Simms
Mike Simms May 09, 2022 6:10PM ET
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I thought the same thing. Ridiculous.
Nick Johnson
Nick Johnson May 09, 2022 1:17PM ET
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You really expect us to believe that the entire make is down because of some no-name electric van maker who most of us have never even heard of?
mad god
mad god May 09, 2022 1:17PM ET
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LOL, If you follow market daily you will know those EV companies. Rivian is a big one and I am surprised you don't know about it. lol
Benjamin USA
Benjamin USA May 09, 2022 1:17PM ET
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My thoughts exactly lmao
John Falcone
John Falcone May 09, 2022 12:56PM ET
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Headline ( Vivian sales ) obviously the author is not a financial person, why is he posting this nonsense story?
Bruno Diaz
Bruno Diaz May 09, 2022 12:47PM ET
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"Sell in May AND Go Away", would be a great Headline...
Bruno Diaz
Bruno Diaz May 09, 2022 12:45PM ET
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Remember the Old Saying "Sell in May AND Go Away"...
Ryan Lennon
Ryan Lennon May 09, 2022 12:45PM ET
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Mitchel Pioneer
Mitchel Pioneer May 09, 2022 12:13PM ET
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Another intraday miracle underway, flagrant as ever.  Sure don't see "rallies" go through these gyrations.  Truly the laughingstock of the investing world.
First Last
First Last May 09, 2022 12:13PM ET
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Market can be green or red but you can only be whining.
Matt Kay
Matt Kay May 09, 2022 12:09PM ET
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Oh Look, spoos rallied 20 points in the matter of 2 minutes. Totally not a scam
First Last
First Last May 09, 2022 12:09PM ET
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Yup, just like not a scam when it dropped "20 points in the matter of 2 minutes" many times before.
Matt Kay
Matt Kay May 09, 2022 12:09PM ET
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First Last Should drop 200 points many times
William Smith
William Smith May 09, 2022 11:44AM ET
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Vivian sales have absolutely ZERO to do with today's selloff. We have an incompetent administration with a destructive energy policy, destructive defense policy, destructive social policies and destructive business policies. That pretty much sums it up.
Draven Umbra
Draven Umbra May 09, 2022 11:44AM ET
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Sounds like a child with anger issues. Did you take your meds today?
John Falcone
John Falcone May 09, 2022 11:44AM ET
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Draven Umbra no one likes the truth, still laughing at the headline
mad god
mad god May 09, 2022 11:44AM ET
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Will Smith, did you slap Chris Rock again
 
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