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.
Emma Searson, an author on the just-released Renewables on the Rise report and the director, 100% Renewable Campaign at Environment America, joined Cheddar to discuss the rapidly growing renewable energy sector. Between 2011 and 2020, the report shows that wind, solar, and geothermal energy production grew about 15 percent annually and that wind and solar alone account for 11 percent of electricity in the country. "There are a few really important drivers of the renewable energy progress that we're seeing all across the country," Searson said, highlighting falling prices, technology improvements, and supportive policies.
Wendy O, host of 'The O Show' joins Cheddar News to discuss the recent rally from cryptocurrency, Ether. She also discussed incoming New York City mayor Eric Adams wanting to teach kids crypto in schools.
Professional sports is facing a reckoning right now over several stories painting an ugly picture of a toxic work environment, encompassing multiple teams in multiple leagues and dealing with different issues.
This week, the NHL's Chicago Blackhawks ousted their general manager and senior director of hockey operations after an investigation confirmed former player Kyle Beach's claims that the team's former video coach Brad Aldrich sexual assaulted him back in 2010, with upper management ignoring his claims until after the team won the Stanley Cup that season. Last night, Joel Quenneville, now the coach of the Florida Panthers but Chicago's coach that season, stepped down from his post.
This comes just a few weeks after the NFL was rocked by leaked emails showing now-former Las Vegas Raiders Head Coach Jon Gruden using racist, sexist and homophobic language. He resigned soon after the emails came to light. We can't forget, though, that those emails come from a much broader investigation of the toxic work environment in the offices of the Washington Football Team. NFL Commissioner Roger Goodell said this week the league wouldn't publicly release anything from its investigation of the team, but lawyers for many of the women interviewed in the case say they want a public report.
And last January, just one month after hiring him, the New York Mets had to fire then-General manager Jared Porter, who admitted to sending explicit, unsolicited texts and images to a female reporter in 2016 when he worked for the Chicago Cubs. ESPN had been in possession of the texts since 2017, but the woman in question asked the network not to run the story out of fear her career would be harmed. She only reached back out to ESPN after she left the field of journalism altogether. Porter has been banned from the sport through next season.
If you believe in the phrase "where there's smoke, there's fire," professional sports is a five-alarm blaze.
Julie DiCaro, senior writer and editor at Deadspin, joins None of the Above to discuss.
Curaleaf CEO Joe Bayern joined Cheddar's "Closing Bell" to discuss the cannabis company's Q3 earnings report, which came in under expectations and included widening losses. Bayern discussed taking a hit on profitability based on the slower-than-expected expansion in some Northeast markets. While the company reduced its fiscal guidance for 2021 due to a general slowing of the cannabis market, he did note that he still sees much room for growth in 2022 and beyond.
Online consignment and thrift shop thredUP reported a Q3 earnings beat on Monday, and CEO James Reinhart joined Cheddar to discuss exceeding expectations and the state of the business overall. Reinhart said the company is thriving while other businesses may face supply chain issues due to the convenience of its system of acquiring secondhand clothing. "In a world where most consumers are feeling squeezed by prices and seeing apparel shortages, everything we have on thredUP is 100 percent in stock and ready to ship," he said. "And so I think it speaks to real opportunity for resale and a company like thredUP during the holiday season and into 2022."
Former NBA star, commentator, and entrepreneur Baron Davis and Deluxe Corporation Chief Brand Officer Amanda Brinkman, joined Cheddar to discuss Season 6 of the reality show "Small Business Revolution," premiering Tuesday. The season will focus on helping six Black-owned businesses in the Twin Cities, Minneapolis and St. Paul. Davis noted learning about the lack of resources, connections, and opportunities for Black business owners during the show. "There are so many things we need to do as a society to address racial injustice and inequity, however, one of the ways for it is economic empowerment," Brinkman added.
Katia Beauchamp, strategic advisor for FemTec Health and former Birchbox CEO, joined Cheddar to discuss the health and beauty sciences company's recent acquisition of subscription beauty supply provider Birchbox. She noted that FemTec wants to change the perception of the brand to include health as well as beauty. "This is something where we are reimagining how can we help consumers discover beauty products that really help them take great care of themselves, have beautiful underlying health that is shown on the exterior too," she added.
Cryptocurrencies are getting off to a good week. Ethereum surged more than 4% in 24 hours on Monday, hitting a new all-time high above $4,700. Meanwhile, Bitcoin surged 7% to a price of $66,250. Haohan Xu, founder and CEO of Apifiny, joins Cheddar News with thoughts on the growing sector.
The latest Marvel movie hit theaters with one of the biggest opening weekends of the year. 'Eternals' opened over the weekend with an estimated $71 million, the fourth-best domestic debut this year. Erik Davis, managing editor at Fandango, joins Cheddar News to talk about the state of box office sales.
