Wall Street takes a breather after record rally, GE jumps on split

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(Businesshala) – Wall Street’s main indexes retreated from record highs on Tuesday as a solid rise in producer prices last month deepened concerns over inflation, while General Electric jumped on its plan to split into three public companies Gave.

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

Seven of 11 major S&P 500 sector indexes were lower in afternoon trading, after the benchmark US stock index and the Nasdaq hit record highs on Monday for an eighth straight session.

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A better-than-expected earnings season, positive news around COVID-19 antiviral pills and the easing of travel restrictions have fueled a record-breaking rally in US stocks recently.

“We are at the point where the market is taking a few chips off the table. It has been a very good run,” said Dennis Dick, a trader at Bright Trading LLC.

Labor Department producer price data indicated higher inflation, which has become a bigger worry for investors than the COVID-19 crisis, could persist for some time amid supply chain issues.

“The only way to keep momentum on the controls is probably to raise rates, so the Federal Reserve is stuck. They just keep hoping it goes away, but I don’t think it’s going to go away,” Dick said.

Markets’ attention now turns to US consumer price data for October on Wednesday, which will highlight the impact of strained supply chains on US consumers.

The Labor Department’s core CPI index, a gauge excluding prices of volatile commodities like food and energy, is expected to rise 4.3% last month.

Among the top performers on Tuesday, General Electric Co. jumped 3.6% after the US conglomerate said it would split itself into three companies focused on aviation, healthcare and electricity.

Tesla Inc. plunged 10.2%, dragging down the consumer discretionary sector and detailing losses after Chief Executive Elon Musk’s Twitter poll to sell his tenth stake received 57.9% of the vote in favor of the sale.

Musk’s proposal also raised questions about whether he again violated his agreement with the US securities regulator.

At 12:06 p.m. ET, the Dow Jones Industrial Average was down 242.70 points, or 0.67%, at 36,189.52, the S&P 500 was down 26.74 points, or 0.57%, at 4,674.96, and the Nasdaq Composite was down 110.77 points, or 0.69%. , at 15,871.59.

Robinhood Markets Inc. slipped 2.8% after the online retail brokerage said a third party had gained access to the email addresses of nearly five million of its customers in the event of a security breach.

Zynga Inc. jumped 9.5% after “Farmville” maker beat quarterly net booking estimates, while DR Horton added 4.7% to the S&P 500 index after reporting upbeat fourth-quarter results.

The number of issues declined to a 1.56-to-1 ratio on the NYSE and 1.91-to-1 on the Nasdaq. The S&P index recorded 29 new 52-week highs and two new lows, while the Nasdaq recorded 84 new highs and 60 new lows.

Reporting by Shreyashi Sanyal and Devik Jain in Bengaluru; Editing by Bernard Orr and Aditya Soni

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