Trader Robert Charmak works on the floor of the New York Stock Exchange, Monday, July 12, 2021. (AP Photo/Richard Drew)
By Damian J. Troise and Alex Veiga
Major US stock indexes closed mostly lower Thursday, pulling back further from the record highs they reached at the start of the week.
The S&P 500 fell 0.3% after shedding an early gain. The benchmark index is now on pace for its first weekly loss in four weeks.
Technology and communications stocks, and companies that rely on consumer spending, accounted for much of the pullback, outweighing gains elsewhere in the market. Energy stocks fell following a broad slide in energy prices. Among the winners were financial stocks, including banks, which have been reporting mostly solid earnings.
Bond yields fell. The yield on the 10-year Treasury note slipped to 1.30% from 1.35% the day before.
Investors continued to focus on where the economy is headed as the pandemic wanes and on what companies have to say about how higher inflation is affecting their business.
“As long as inflation ends up being transitory, as the Fed believes, the economy is set to continue to do real well,” said Chris Gaffney, president of TIAA Bank World Markets. "The big risk is that inflation spikes and stays here.”
The S&P 500 fell 14.27 points to 4,360.03. The tech-heavy Nasdaq slid 101.82 points, or 0.7%, to 14,543.13. The Dow Jones Industrial Average bucked the trend and bounced back after being down much of the day. The blue-chip index gained 53.79 points, or 0.2%, to 34,987.02.
Small company stocks also fell. The Russell 2000 index lost 12.07 points, or 0.6%, to 2,190.29.
On Thursday, Federal Reserve Chair Jerome Powell delivered his second day of testimony before Congress. Powell reiterated that signs of inflation should ease or reverse over time, while acknowledging that the U.S. is in the midst of an unparalleled economic reopening on the heels of a pandemic-induced recession.
The government said Wednesday that inflation at the wholesale level jumped 1% in June, pushing price gains over the past 12 months up by a record 7.3%. That followed a report a day earlier showing consumer prices posted the biggest 12-month gain in 13 years.
Investors are also trying to determine how the economic recovery will play out for the rest of the year as the world tries to get back to normal with COVID-19 waning, but still lingering.
“There’s a big question mark around COVID-19 shifting from an acute to a chronic condition for the global market,” said Rod von Lipsey, managing director at UBS Private Wealth Management.
While the virus and its variants aren’t likely to severely disrupt the economic recovery, expectations for a quick snapback have been stymied by persistent mutations, he said.
New data on applications for unemployment benefits signaled the labor market continues to improve. The Labor Department said Thursday that unemployment claims fell by 26,000 last week to 360,000, the lowest level since the pandemic struck last year.
More companies released their latest quarterly earnings Thursday. Progressive fell 2.6% after the insurance company’s results fell far short of analysts’ forecasts. Morgan Stanley rose 0.2% after reporting a 10% rise in quarterly profits from a year earlier.
A larger bulk of companies will start reporting next week, when earnings season gets into full swing.
American International Group, better known as AIG, rose 3.6% after the insurance company reached a deal with Blackstone Group to help manage some of its life insurance assets.
The Super Bowl is only a few days away, and the game is currently tracking to be the most expensive one ever.
Gametime, a website and app for last-minute tickets, says the average ticket price for the NFL's championship game is $9,502.50, with the most expensive seats costing nearly $38,000. That's a far cry away from the average ticket price of the first-ever Super Bowl in 1967, which was only $12. The average ticket price increased by more than $8,000 in just the past decade. Matt Rados, Senior Operations Manager at Gametime, joins Cheddar News' Closing Bell to discuss.
Earlier this week, digital investment advisor Betterment announced that it has hired Makara, a company known for its management of cryptocurrency portfolios. Sarah Levy, CEO of Betterment, joins Cheddar News' Closing Bell, where she explains why crypto represents such a promising long-term play and how her company stands to benefit from this latest move.
At-home medical labs company Getlabs raised $20 million in a Series A round, led by Emerson Collective and the Minderoo Foundation. Getlabs aims to be the boots-on-the-ground partner to telehealth. The company says more than 70% of medical decisions still require collecting diagnostic tests in person, and that it fills that void by delivering health care directly to their patients' homes. Founder & CEO of Getlabs Kyle Michelson joined Cheddar News' Closing Bell to discuss.
The White House laid out plans for a $5 billion investment into a national network of charging stations to ease EV driving anxiety. Bruce Brimacombe, CEO of EV infrastructure GOe3 joined Cheddar News to discuss how much needs to be done for drivers to get over the fear of running out of energy. "People need to be able to do what they're doing now," he said. "But that is the way that if you're going to buy an electric car, you got to feel like you're not changing your world." Brimacombe noted that building out the infrastructure between cities was GOe3's own focus.
U.S. automakers are saying that the blockade of the Ambassador Bridge, a crucial border crossing between the U.S. and Canada, is affecting their production lines. Michelle Krebs of Cox Automotive warns that the disruption "couldn't come at a worst time," amid chip and labor shortages in Detroit.
AND DETROIT-BASED AUTO MAKERS SAY THEY ARE SHUTTING DOWN PLANTS OR SCALING BACK PRODUCTION BECAUSE OF PARTS SHORTAGES.
Sonos reported better than expected Q1 earnings amid chip shortage with the release of its Roam product. CFO Brittany Bagley joined Cheddar News to discuss the smart speaker maker's successful report and its plans to hit its 2024 targets as people leave their homes as pandemic restrictions ease. "Even as people head out in the world, it doesn't mean they don't like to listen to music at home or watch a streaming movie at home," she said. "So there's still a real role for us and our products in peoples lives, sort of, no matter what else they're doing."
Lynn Martin, president of the NYSE Group, explains why investors at the New York Stock Exchange should still feel confident despite the recent Wall Street volatility and discusses the landscape for 2022 when it comes to IPOs and retail investors.
The merger of WarnerMedia and Discovery received Justice Department approval on Wednesday, and Patty Hirsch, EVP of consumer and digital platforms at WarnerMedia, joined Cheddar News to discuss current and future offerings from the media conglomerate that will control both HBO Max and Discovery+. "Content really drives so much, and CNN has always had a very long history of creating an incredible documentaries, incredible content … and this service I think is going to ultimately provide the kind of content consumers want and the kind of content that consumers are going are going to pay for," she said. Hirsch also discussed NFTs in use through its Turner Sports and DC brands.
Black entrepreneurs lead the way in the creation of new businesses, but they often cannot get the necessary funding to get their business off the ground. The Fearless Fund is on a mission to change that, and help Black business owners get venture capital. The fund also offers a unique grant program meant to help entrepreneurs with growth, peer coaching, and more, including grants between $10,000 and $20,000. Arian Simone, Co-Founder and General Partner of Fearless Fund, joins Closing Bell to discuss the Fund's mission, how it helps Black entrepreneurs, and more.
