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

Published 05/09/2022, 09:29 AM
Updated 05/09/2022, 09:37 AM
© Reuters

© 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.

Latest comments

a company with 500 car sales did this ? you can't be serious
Hahahaha change profession dude!
Rivian? LMAO
I thought the same thing. Ridiculous.
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?
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
My thoughts exactly lmao
Headline ( Vivian sales ) obviously the author is not a financial person, why is he posting this nonsense story?
"Sell in May AND Go Away", would be a great Headline...
Remember the Old Saying "Sell in May AND Go Away"...
no
Another intraday miracle underway, flagrant as ever.  Sure don't see "rallies" go through these gyrations.  Truly the laughingstock of the investing world.
Market can be green or red but you can only be whining.
Oh Look, spoos rallied 20 points in the matter of 2 minutes. Totally not a scam
Yup, just like not a scam when it dropped "20 points in the matter of 2 minutes" many times before.
Should drop 200 points many times
Investors are making a huge miscalculation. The risk in markets right now is so very high. And yet, no hedging in gold. It’s like not believing in markets and still not letting go. This means when they finally let go, it will be a massacre.
GLD is near all time high
East or west india is the best....stay with peace loving Country......
East or west india is the best....stay with peace loving Country......
East or west india is the best....stay with peace loving Country......
420 doesn't make you high anymore
let the index go down to halfway traders will enjoy riding a wolf then
WtF does Rivian have to do with the markets lmao
the author is short, if he knows what that is.
We go from peace and prosperity to sky high prices, crashes and war. Stolen elections have consequences.
Stop being Delusional. Trumps Aproval Ratings was Worst than Bidens . Im not trying to take sides or anything like that. But our Economy was getting bad during Trumps Presidency. Record Inflation etc, is whats bringing everything Down. And on top of that , theres a War going on in Ukraine.
Putin stealing election to stay in power resulted in him being able to invade Ukraine & cause global inflation.
Trump wanted out of NATO so badly because he knew Putin would invade Ukraine and wanted him to have a free hand. If anyone is a traitor, it's trump.
Only 32k left on dow. So 32 days of daily 1k dwn n u r done wid all prob such as Rivian sales, interest rate, inflation etc
401Ks getting cut in half
Its your choice how you invest your 401 k. Put the money in something safe. You wont make much money, but you won’t loose any either.
You need to actively manage your account. Some people exited the market in January, and are buying back in now.
Rivian? Lol its a shell joke company which produces nothing. jokers at investing
Rivian? Lol its a shell joke company which produces nothing. cl0wns at investing
Let the intervention begin.  Floor under the losses already, and now the work begins to whisk them out of the system.  Uninhibited "gains" and managed losses, only in the US Ponzi Scheme, biggest investment JOKE in the world.  How many points in losses will magically disappear today?
Are fears of Civil War 2.0 causing the fears.
your headlines are garbage. everyday....
I can’t believe he gets paid, wonder who he’s writing for?
Anyway you look at it a recession is always inevitable.
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