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.
Michele Schneider, Partner and Director of Trading Research & Education for MarketGauge.com, joins Cheddar News' Closing Bell, where she says the spread of the Omicron variant and Jerome Powell's comments following the latest Fed decision are spooking investors heading into the weekend.
Andrew Hawkins, transportation editor at The Verge, joins Cheddar News' closing Bell, where he breaks down FedEx's EV truck delivery from GM's BrightDrop Company while also discussing the shipping giant's strategy following its latest earnings report.
Alinda Mashiku, Conjunction Analysis and Risk Assessment Deputy Manager at the NASA Goddard Space Flight Center, joins Future of Space: Humankind's Leap Forward to explain how space debris is threatening operations in space at a time when more satellites are being deployed.
Marshall Smith, Senior Vice President of Space Systems at Nanoracks and Kirk Shireman, Vice President of the Lunar Exploration Campaign at Lockheed Martin join Future of Space: Humankind's Leap Forward to discuss upcoming plans for developing their Starlab commercial space station after being awarded a $160 million contract by NASA.
Both AMC and Cinemark shares rose Friday after a pandemic-era record number of moviegoers attended the 'Spider-Man: No Way Home' opening night. The movie is expected to pull at least $150 million in box office sales opening weekend. But is this momentum enough for theater chains as the COVID-19 omicron variant poses new threats? Daniel Loria, Editorial Director at Boxoffice PRO, joins Cheddar News' Closing Bell to discuss.
The billionaire space race took off in 2021, making major strides in space tourism. That growth is only expected to skyrocket in the next year, as the government and private institutions and companies look to shape the final frontier's exploration. Cheddar News dives into the biggest moments of the year in space, and what comes next for space travel and tourism.
While other CEOs of Southwest and American Airlines questioned current mask mandates in front of Congress, Delta CFO Dan Janki in his exclusive interview with Cheddar, was more cautious about doing away with the safety measure. "We're right now at the beginning of another wave," he said. "This is probably not the time to change mask policy." Janki also discussed his airline's future in loyalty program pricing, international travel, meal services, and stock pricing.
E-commerce data platform Rokt is prepping for an IPO as it comes off of a $325 million Series E fundraise, and CEO Bruce Buchanan joined Cheddar to discuss the future of his company. He explained how Rokt uses data science to optimize the consumer experience with their clients and discussed the goal to go public in 2023. "We're at a size and scale now where it's important we can give liquidity to investors, we can use the public markets to attract more talent, and we can use the public markets also to go on and acquire more businesses," he said. "We think it's about time that we do list."
Rideshare company Lyft is following its competitor Uber into the food delivery market by partnering with Olo, the on-demand commerce platform, and its dispatch network. Joining Cheddar to discuss the team-up, Olo founder and CEO Noah Glass. "Consumers will be able to place orders through the same apps and websites they go to … and see delivery as an option," he said. "And Lyft is now one of the providers who may be picking up the order on behalf of the consumer and taking it from the restaurant to the consumer." Glass also stated that Olo optimizes deliveries without adding the burden of additional fees on the restaurant side.
