In this photo provided by the New York Stock Exchange, trader Mark Muller, right, and specialist Peter Mazza work on the trading floor, Wednesday, March 24, 2021. Stocks were moving mostly higher on Wednesday, helped by a recovery of bank and industrial stocks. Bond yields were steady after rising earlier this week. (Nicole Pereira/New York Stock Exchange via AP)
By Damian J. Troise and Alex Veiga
A late-afternoon burst of selling on Wall Street erased an early gain for stocks Wednesday, pulling the market further below the all-time high it reached just a week ago.
The S&P 500 dropped 0.5% after having been up 0.8% in the early going. Technology and communication services companies accounted for the heaviest selling, outweighing gains in financial, energy, and industrial stocks. Bond yields mostly fell after rising earlier this week.
“The markets are kind of choppy and sideways and everything is sort of trying to figure out who’s in charge, where’s the equilibrium — and it creates uncertainty,” said Randy Frederick, vice president of trading & derivatives at Charles Schwab. “When people don’t know what to do, they either do nothing or they sell. They very rarely buy.”
The S&P 500 fell 21.38 points to 3,889.14. The benchmark index is on track for its second straight weekly decline. The Dow Jones Industrial Average slipped 3.09 points, or less than 0.1%, to 32,420.06, after a 364-point gain vanished by late afternoon. The Nasdaq slid 265.81 points, or 2%, to 12,961.89.
Smaller company stocks fared worse than the broader market. The Russell 2000 index lost 51.42 points, or 2.4%, to 2,134.27.
Investors had their eye on Washington, where Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen spoke before the Senate about the government's efforts to combat the economic impact of the coronavirus pandemic. The Biden administration is considering up to $3 trillion in additional spending on infrastructure, green energy, and education.
Yellen believes the U.S. government has more room to borrow but said higher taxes would likely be required in the long run to finance future spending increases. Meanwhile, Powell reiterated that the recent jump in the yield on the 10-year Treasury, which soared from less than 1% at the beginning of the year to 1.62% Wednesday, was mostly a sign of confidence among investors that the economy is improving.
Bond yields have risen this year as traders have been watching the potential for inflation pressures to pick up after struggling economies were flooded with credit and government spending. That has depressed U.S. bond prices, prompting some to shift money out of stocks.
While rising interest rates are a key concern, the pandemic remains a dominant topic for investors. Stocks fell on Tuesday after Germany, Europe’s biggest economy, and the Netherlands extended lockdowns and imposed new travel and business curbs in response to spikes in infection. That followed similar moves earlier by Italy and France.
Traders are also juggling worries about the speed of vaccine distribution, COVID-19 cases, and the potential for future tax changes crimping corporate profits, said Brad McMillan, chief investment officer for Commonwealth Financial Network.
“There’s a feeling that we’re not quite done with COVID-19 yet at all,” McMillan said. “That, combined with other concerns, is creating a lot of uncertainty.”
Technology and communication stocks dragged the market lower Wednesday. Apple fell 2%, while Facebook lost 2.9%.
Bank stocks, which took a beating on Tuesday, were among the best performers. Banks have been volatile the last couple of weeks as investors try to gauge the impact of higher interest rates on the U.S. economy. Higher interest rates can slow economic momentum, but they also allow banks to charge more for loans. JPMorgan Chase added 0.8%.
GameStop sank 33.8% after reporting results that missed Wall Street’s forecasts, though the stock is still up more than sixfold since the beginning of the year after it became a social media darling for a swarm of online investors. The company took no questions from investors on its quarterly conference call late Tuesday.
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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