U.S. flags fly from the facade of the New York Stock Exchange, Monday, June 7, 2021. Stocks are opening mostly higher on Wall Street as gains for Big Tech companies offset weakness in banks and other parts of the market. The S&P 500 edged up 0.1% in the early going Wednesday, June 9. (AP Photo/Richard Drew)
By Damian J. Troise and Alex Veiga
A slide in banks and industrial companies nudged stocks on Wall Street to modest losses Wednesday after an early gain faded in the last half-hour of trading. Stocks championed by hordes of online retail investors, the “meme” stocks as they have become known, were volatile once again.
The S&P 500 slipped 0.2%, erasing its meager gain from a day earlier. The benchmark index's modest moves this week have it on track for its first weekly loss in three weeks. The Dow Jones Industrial Average gave up 0.4%, while the Nasdaq held up somewhat better, ending down just 0.1%.
Treasury yields slipped. The yield on the 10-year Treasury fell to 1.49% from 1.52% late Tuesday. The falling yields broadly weighed down banks, which rely on higher yields to charge more lucrative interest on loans. JPMorgan and Citigroup fell 1.2%.
Several health care companies made solid gains. Merck rose 2.3% after announcing a supply agreement with the U.S. and Canada for a potential COVID-19 treatment. AbbVie gained 1.5% after announcing a collaboration with Caraway Therapeutics to make treatments for Parkinson’s disease and other neurodegenerative disorders.
All told, the S&P 500 fell 7.71 points to 4,219.55. The Dow lost 152.68 points to 34,447.14, while the Nasdaq Composite gave up an early gain, shedding 13.16 points to 13,911.75. The tech-heavy index was lifted by the same Big Tech companies that have pushed it generally higher for the last 18 months. Microsoft rose 0.4% and Amazon added 0.5%.
Small company stocks, which have outgained the broader market this year, also fell. The Russell 2000 index gave up 16.63 points, or 0.7%, to 2,327.13.
Investors continue to focus a significant amount of attention on inflation. China’s producer price index, which measures prices of raw goods and services, jumped 9% from a year earlier in May, the fastest increase since 2008 and above analysts’ forecasts. Surging prices for oil and other commodities and manufacturing components such as semiconductors were the main factor behind the jump in producer prices there.
Aside from surging prices of raw materials, fuel and other items needed for manufacturing, factories are struggling to keep up with demand as the pandemic recedes in many places. That has pushed up prices of everything from food to household staples.
Investors will get closely watched U.S. inflation data on Thursday and how it might impact ultra-low interest rates and other market-supporting policies.
The market has been relatively constrained over the last several days and investors have parsed any data to judge whether rising inflation will be temporary, as the Federal Reserve thinks, or more permanent.
The Labor Department's release of the consumer price index Thursday will add to that discussion, particularly since it comes shortly before the Federal Reserve's next meeting on interest rate policy next week.
“Is it transitory, or is the Fed behind the curve?” said Sal Bruno, chief investment officer at IndexIQ. "That is going to be a lot of the discussion tomorrow with people reading into which way we’re going."
Elsewhere in the market, volatility in stocks embraced by investors using online forums like Reddit continued for another day Wednesday. Clover Health fell 23.6% while AMC Entertainment sank 10.4%. Wendy’s sank 12.7% after soaring 25.9% a day earlier.
The original “meme” stock, GameStop, said after the closing bell Wednesday that it has brought on a pair of Amazon veterans as its new chief executive and chief financial officer to aid in its much anticipated digital turnaround. The company also reported a smaller quarterly loss than a year ago as revenue increased. Its shares fell 3% in after-hours trading.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
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