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 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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