The New York Stock Exchange operates during normal business hours in the Financial District, Wednesday, Oct. 13, 2021, in the Manhattan borough of New York. (AP Photo/John Minchillo, file)
By Damian J. Troise
Stocks ended moderately lower on Tuesday, ending an eight-day winning streak for the market that had been fueled by strong company earnings and economic data.
The S&P 500 index lost 16.45 points, or 0.4%, to close at 4,685.25. The last time the S&P 500 had eight straight days of gains was April 2019. The Dow Jones Industrial Average fell 112.24 points, or 0.3%, ending at 36,319.98 and the Nasdaq lost 95.81, or 0.6%, to 15,886.54.
The market was pulled lower by companies that rely on consumer spending and technology stocks, which had driven the market higher in recent days.
Tesla lost 12% after its founder Elon Musk said he would sell 10% of his holdings in the electric car maker, based on the results of a poll he conducted on Twitter. The company’s stock is down more than 16% so far this week, however the stock is still up 45% so far this year.
Meanwhile PayPal — coincidentally a company co-founded by Musk more than two decades earlier — dropped 11% after the company’s cut its full-year outlook and revenue forecasts.
PayPal is facing increased competition from other financial technology companies like Square, Affirm and even traditional banks, who have moved decisively into PayPal’s online payments kingdom.
Robinhood fell 3.4% after the popular trading app reported a data breach the day before.
Bond yields also fell Tuesday. That pulled down the stock prices of banks, which rely on higher yields to charge more lucrative interest on loans. The yield on the 10-year Treasury fell to 1.44% from 1.49% late Monday.
Bank stocks like Citigroup, Bank of America and JPMorgan Chase closed down roughly 1% or more.
One stock that did well was General Electric, which rose 2.6%. The once-unstoppable corporate behemoth that made everything from lightbulbs to nuclear reactors announced it would break itself into three separate companies.
The combination of chronic mismanagement, years of asset sales, as well as new regulations after the Great Recession made GE a shell of what it used to be. It no longer makes appliances, no longer owns NBCUniversal and spun off its financing arm, GE Capital, years before.
Sectors that are considered less risky, including household product makers and utilities, held up better than the rest of the market.
Investors received another reminder from the Labor Department that rising inflation remains persistent. The agency reported that inflation at the wholesale level rose 8.6% in October from a year earlier, matching September’s record annual gain.
A wide range of companies are facing higher costs for raw materials and energy while contending with supply chain problems. That has been cutting into their operations and prompting them to raise prices on finished goods, which in turn has been making products and services more costly for consumers.
The Labor Department will release its Consumer Price Index for October on Wednesday, giving a more detailed picture on how inflation is impacting consumers.
Inflation remains a key concern for investors, especially as the Federal Reserve moves ahead with plans to trim back, or taper, its bond purchases that have helped maintain low interest rates.
“The Fed did such a good job of telegraphing it, but there is still the mechanics of the actual tapering,” said Ross Mayfield, investment strategist at Baird.
The latest round of earnings is nearing its end, but investors still have several big corporate report cards to review. Walt Disney will report its results on Wednesday. Tapestry, the owner of Coach and other luxury brands, will report its results on Thursday.
The benchmark S&P 500 is coming off a series of record highs and eight straight gains, tying its longest winning streak since April 2019.
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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