A banner for Squarespace hangs at the New York Stock Exchange, Wednesday, May 19, 2021. The New York-based website-creation platform begins trading with a direct listing at the exchange Wednesday. (AP Photo/Mark Lennihan)
By Damian J. Troise and Alex Veiga
Stocks closed broadly lower on Wall Street Wednesday, extending the market’s downturn to a third day. The price of Bitcoin and other cryptocurrencies dropped sharply in a surge of selling. The S&P 500 lost 0.3%. Bitcoin’s price was down 7% to just over $40,000, according to the crypto news site Coindesk, having swung in a huge range of as low as $30,202 and as high as $43,621 over the past day. The stock of the digital currency exchange operator Coinbase, whose website went down briefly in the morning, fell almost 6% and is down sharply from its IPO just over a month ago.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Stocks fell broadly in afternoon trading Wednesday as the market's downturn entered a third day. Meanwhile the price of Bitcoin and other cryptocurrencies dropped sharply.
The S&P 500 index was down 1% as of 2:19 p.m. Eastern. The benchmark index is on track for its worst weekly loss in over two months. The Dow Jones Industrial Average was down 392 points, or 1.2%, to 33,675 points and the Nasdaq fell 0.8%.
Bank stocks were among the biggest decliners. Goldman Sachs fell 2.5% and Wells Fargo fell 2.2%. A range of retailers and other companies that rely directly on consumer spending were also posting sharp drops. Home Depot slid 1.3%, Gap fell 3.7% and L Brands dropped 4.5%.
Energy sector stocks, the biggest gainers so far this year, bore the heaviest losses as the price of U.S. crude oil skidded 3.5%.
Digital currencies were in freefall after China’s banking association issued a warning over the risks associated with digital currencies. A statement posted on the industry association’s website said all members should “resolutely refrain from conducting or participating in any business activities related to virtual currencies.”
Bitcoin’s price was down 10.5% to around $38,561, according to the crypto news site Coindesk, well below the recent high of over $63,000 it reached in mid-April. This comes after longtime Bitcoin advocate Tesla recently recently said it would no longer accept Bitcoin as payment for its cars, reversing its earlier position.
The selling was so intense that the web site of Coinbase, an online brokerage for digital currencies, was temporarily down in the morning. Coinbase's stock dropped 6.8%, and is now down about 35% from the peak it reached on April 16, just two days after its IPO.
Investors also continue to be focused on whether rising inflation will be temporary or whether it will endure. Prices are rising for everything from gasoline to food as the economy recovers from its more than year-long malaise.
The Federal Reserve expects that rising inflation will be temporary and related to the recovering economy, but investors are still uncertain and have been more cautious.
“That’s one of the things people are struggling with,” said J.J. Kinahan, chief strategist with TD Ameritrade. “They go to get gas and get in line at a grocery store and they see higher prices; there's this mixed message for the average investor.”
The fear is that the Federal Reserve will have to dial back its extensive support if inflation persists. That includes record-low interest rates and the monthly purchase of $120 billion in bonds meant to goose the job market and economy. For all the worries about inflation, however, many professional investors are echoing the Federal Reserve in saying that they expect rising prices to be “transitory.”
Higher interest rates drag on most of the stock market, but they are particularly painful for stocks, especially technology shares, considered the most expensive and those bid up for profits expected far into the future.
Treasury yields were mostly higher. The yield on the 10-year Treasury note rose to 1.68% from 1.64% late Tuesday.
Target gained 5.5% after reporting strong results as consumers, some flush with U.S. stimulus payments, were eager to spend as the pandemic eases.
Cheddar's Big Game Special gives you all the info you need heading into Sunday's event. Pro Football Hall of Famer Terrell Davis, Big Game MVP Hines Ward, and Big Game Champion Emmanuel Sanders dissect the action set to take place on the field, Olivia Harlan Dekker delivers her winning wagers, Tom Morton breaks down what we should expect from advertisers, Azia Celestino showcases the atmosphere from Los Angeles, and Baker Machado discusses what viewers should expect to see unfold during the halftime show.
As the Cincinnati Bengals and Los Angeles Rams prep to face each other in the Big Game at SoFi Stadium in LA, 55 percent of a record number of bettors are projected to drop money on the Rams. Casey Clark, the senior vice president of strategic communications for the American Gaming Association, joined Cheddar News to share some data and predictions based on the greater interest in gambling on Super Bowl LVI. "You know that means that people are migrating away from the predatory illegal market and corner bookie and moving their action into the legal marketplace," he said. "So really encouraging for consumer protections and for those of us who might want to have a little action on the game."
Facebook parent Meta and Grammy Award-winning singer Ciara have joined forces to help black female-owned small businesses. Selected businesses will receive marketing mentorship from Meta along with $100,000 to put into their brand. One such business, The Self Care Suite, is a platform that supports mental health, and founder Tara Pringle Jefferson, along with Irene Walker, Meta Elevate founder and program manager, joined Cheddar News to discuss the program. "Having this opportunity with Meta, with Ciara, really will allow us to focus on our virtual programming, to focus on our e-commerce shop, and, as we kind of adjust, to the new normal in 2022," said Pringle Jefferson.
Tesla has been under mounting regulatory scrutiny by the NHTSA, and has issued numerous recalls, including four within the past two weeks. While the company has issued recalls over the years, the number seems to be increasing in recent months as the company issues fixes for seat belt chimes, pedestrian alerts, its self-driving software, and more. What's behind this uptick in recalls — and how might this impact brand loyalty? Al Root, Senior Writer at Barron's, joins Closing Bell to discuss.
Under Armour released a successful Q4 earnings report amid supply chain issues. The apparel company said it invested in analytics to decipher what drives consumers to its brand. However, the company warned of potential supply problems going forward due to COVID.
Hyperice is a technology company that specializes in physical recovery for athletes, and it's now partnering with the NFL. Christian McCaffrey, Carolina Panthers running back and Hyperice athlete-investor, and Jim Huether, Hyperice CEO, joined Cheddar News to discuss the partnership. "It's definitely for both for performance and for recovery, as somebody who plays a brutal sport and have to go through some of the unfortunate realities of injury," McCaffery said of the products. "You're always fighting for that 0.1 percent difference between winning and losing and and the little things and every second matters."
Aurora Cannabis showed a beat on sales for its quarterly earnings report, a positive sign despite a loss of $59 million. CEO Miguel Martin, joined Cheddar Movers to discuss its latest earnings and prospects for future growth. "If you look at our core businesses, they've all had a great quarter, so steady as we go. Our transformation plan is absolutely on track and we feel really good about where the company's going," he said. "Our balance sheet has never been stronger." Martin also discussed entering the U.S. market and the prospects for the medical marijuana market.
Elon Musk announced that he expects Starship to reach orbit in 2022. The SpaceX CEO delivered updates about the largest space vehicle to be constructed from its Texas facility. Jim Cantrell, CEO and co-founder at Phantom Space, joined Cheddar News to talk about the future of Starship. "I've always done wrong by betting against Elon," he said. "The one thing that I find very curious is it launches 100 metric tons into space, and last year, in the entire year, we launched 750. So, you know, with about seven launches, he could launch every satellite on Earth."
