Wall Street losses end streak of record highs as inflation worry weighs on market

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NEW YORK (Businesshala) – Wall Street closed lower on Tuesday, ending a multi-day rally of consecutive record closings as profit-taking and concerns over ongoing inflation fueled a broader sell-off.

FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US November 8, 2021. Businesshala/Brendan McDermid

All three major US stock indexes lost ground, marking the end of an eight-session streak of all-time closing highs set by the S&P 500 and Nasdaq.

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After such a run, and in the absence of market-driven catalysts, market participants were driven to take profits.

“We’ve had an incredible run, so it’s perfectly normal to blow some air out of the balloon,” said Ryan Detrick, chief market strategist at LPL Financial in Charlotte, North Carolina.

“It’s a reminder that stocks can’t move every day,” Detrick said. “We are seeing some oversold weakness today, nothing more concerning.”

The Labor Department’s Producer Prices (PPI) report shows inflation continues to rise as ongoing goods and labor supply challenges send price increases ahead of the US Federal Reserve’s average annual 2% inflation target.

Wednesday’s CPI report will be examined for clues to the extent to which producer prices are being passed along to the consumer, whose spending accounts for about 70% of the US economy.

(Graphic: Inflation:)

The Dow Jones Industrial Average fell 112.24 points, or 0.31%, to 36,319.98, the S&P 500 fell 16.45 points, or 0.35%, to 4,685.25, and the Nasdaq Composite fell 95.81 points, or 0.6%, to 15,886.54.

Five of the S&P 500’s 11 key sectors ended the session, with consumer discretionary losing 1.4%, the biggest percentage drop. Utilities rallied with a gain of 0.4%.

The finish line appears to be in sight for the third-quarter earnings season, with 445 of the S&P 500 reporting companies. According to Refinitiv, 81% of them have defeated Consensus.

General Electric Co. rose 2.6% after the 129-year-old industrial conglomerate announced that it would split into three separate public companies to simplify its business.

Tesla Inc. declined 12.0%, weighing in on the consumer discretionary sector and detailing its losses after a Twitter poll by Chief Executive Elon Musk, his proposal to sell a tenth stake, received 57.9% of the vote in favor of the sale. This raised questions about whether Musk violated the agreement with the US Securities and Exchange Commission (SEC).

Online retail stock-trading app Robinhood Markets Inc. reported a security breach affecting nearly 5 million customers, causing its shares to drop 3.4%.

On the plus side, upbeat quarterly results saw video game maker Zynga Inc jump 9.4% and homebuilder DR Horton’s shares jumped 5.2%.

A decline in the number of issues moving to a 1.13-to-1 ratio on the NYSE; On the Nasdaq, a 1.40-to-1 ratio favored the downside.

The S&P 500 posted 34 new 52-week highs and two new lows; The Nasdaq Composite posted 120 new highs and 73 new lows.

Volume on US exchanges stood at 11.02 billion shares, compared to an average of 10.76 billion over the past 20 trading days.

Reporting by Stephen Culp; Additional reporting by Shreyashi Sanyal and Devik Jain in Bengaluru; Editing by Cynthia Osterman

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