Trader Jonathan Mueller works in his booth on the floor of the New York Stock Exchange, Tuesday, July 13, 2021. Stocks wobbled between small gains and losses in early trading Tuesday as investors weigh the latest quarterly earnings reports from big U.S. companies and concerns about inflation. (AP Photo/Richard Drew)
By Damian J. Troise and Alex Veiga
Stocks closed lower on Wall Street Tuesday, bringing major indexes slighly below the record highs they set a day earlier. The S&P 500 fell 0.4%. Investors were weighing the latest quarterly earnings reports from big U.S. companies and concerns about inflation. Inflation has been a lingering concern for the markets as investors try to gauge how the Federal Reserve will respond to it. The latest report from the Labor Department showed yet another increase in consumer prices in June that surprised economists. Banks, including Goldman Sachs and JPMorgan Chase helped kick off the latest round of corporate earnings reports, along with PepsiCo.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Stocks edged lower in afternoon trading Tuesday as investors weigh the latest quarterly earnings reports from big U.S. companies and concerns about inflation.
Inflation has been a lingering concern for the markets as investors try to gauge how it will impact everything from the economic recovery's trajectory to the Federal Reserve's reaction. The latest report from the Labor Department shows yet another increase in consumer prices in June that surprised economists.
The S&P 500 fell 0.3% as of 3:21 p.m. Eastern. The Dow Jones Industrial Average fell 102 points, or 0.3%, to 34,893 points and the Nasdaq was down 0.3%.
Most stocks within the benchmark S&P 500 were losing ground, but technology companies made solid gains and helped counter some of the broader drop. Banks fell broadly. The muted trading comes a day after the three major stock indexes set record highs.
Small company stocks took some of the heaviest losses. The Russell 2000 index was down 1.5%.
Prices for U.S. consumers jumped in June by the most in 13 years, extending a run of higher inflation that has been raising concerns on Wall Street that the Fed might consider withdrawing its low-interest rate policies and scaling back its bond purchases earlier than expected.
Much of the increase in prices for goods, such as used cars, is mostly tied to a surge in demand and lack of supply. But prices for many items, like lumber and other raw materials, either is easing or will ease as suppliers continue to ramp up operations, said Jamie Cox, managing partner at Harris Financial Group.
“That’s a problem and it shows up in all kinds of places but it’s not going to be there forever,” Cox said.
Major companies opened up the latest round of corporate earnings with investors listening closely for clues about how companies have fared during the recovery and how they see the rest of the year unfolding.
Goldman Sachs slipped 0.9% despite reporting the second-best quarterly profit in the investment bank's history. JPMorgan Chase fell 1.3% after giving investors a mixed report with solid profits but lower revenue as interest rates fell over the last three months.
Bond yields reversed course from early trading and rose to 1.41% from 1.36% late Monday. Overall, yields have been falling for months after a sharp spike earlier in the year.
The calmer bond market is partly signaling more confidence that rising inflation will likely be temporary and tied mostly to the economic recovery.
“That narrative is pretty well anchored and the bond market doesn’t fear the Fed tapering or raising rates,” Cox said.
Solid earnings did help some companies make gains. PepsiCo rose 2.1% after beating Wall Street's second-quarter profit and revenue forecasts.
Boeing fell 4% after announcing production cuts for its large 787 airliner because of a new structural flaw in some planes that have been built but not delivered to airline customers.
A rare magnum of Dom Pérignon Vintage 1961 champagne that was specially produced for the 1981 wedding of Prince Charles and Lady Diana has failed to sell during an auction. Danish auction house Bruun Rasmussen handled the bidding Thursday. The auction's house website lists the bottle as not sold. It was expected to fetch up to around $93,000. It is one of 12 bottles made to celebrate the royal wedding. Little was revealed about the seller. The auction house says the bids did not receive the desired minimum price.
The New York Times and President Donald Trump are fighting again. The news outlet said Wednesday it won't be deterred by Trump's “false and inflammatory language” from writing about the 79-year-old president's health. The Times has done a handful of stories on that topic recently, including an opinion column that said Trump is “starting to give President Joe Biden vibes.” In a Truth Social post, Trump said it might be treasonous for outlets like the Times to do “FAKE” reports about his health and "we should do something about it.” The Republican president already has a pending lawsuit against the newspaper for its past reports on his finances.
OpenAI has appointed Slack CEO Denise Dresser as its first chief of revenue. Dresser will oversee global revenue strategy and help businesses integrate AI into daily operations. OpenAI CEO Sam Altman recently emphasized improving ChatGPT, which now has over 800 million weekly users. Despite its success, OpenAI faces competition from companies like Google and concerns about profitability. The company earns money from premium ChatGPT subscriptions but hasn't ventured into advertising. Altman had recently announced delays in developing new products like AI agents and a personal assistant.
President Donald Trump says he will allow Nvidia to sell its H200 computer chip used in the development of artificial intelligence to “approved customers” in China. Trump said Monday on his social media site that he had informed China’s leader Xi Jinping and “President Xi responded positively!” There had been concerns about allowing advanced computer chips into China as it could help them to compete against the U.S. in building out AI capabilities. But there has also been a desire to develop the AI ecosystem with American companies such as chipmaker Nvidia.
U.S. sports betting is booming as NFL and college football fuel massive activity. BetMGM CEO Adam Greenblatt breaks down trends, growth, and what’s next.
President Donald Trump says a deal struck by Netflix last week to buy Warner Bros. Discovery “could be a problem” because of the size of the combined market share. The Republican president says he will be involved in the decision about whether federal regulators should approve the deal. Trump commented Sunday when he was asked about the deal as he walked the red carpet at the Kennedy Center Honors. The $72 billion deal would bring together two of the biggest players in television and film and potentially reshape the entertainment industry.
Disney's changes to a program for disabled visitors are facing challenges in federal court and through a shareholder proposal. The Disability Access Service program, which allows disabled visitors to skip long lines, was overhauled last year. Disney now mostly limits the program to those with developmental disabilities like autism who have difficulty waiting in lines. The changes have sparked criticism from some disability advocates. A shareholder proposal submitted by disability advocates calls for an independent review of Disney's disability policies. Disney plans to block this proposal, claiming it's misleading. It's the latest struggle by Disney to accommodate disabled visitors while stopping past abuses by some theme park guests.
