Wall Street closes as investors raise profits and inflation Financial market news


Shares gave up early gains and closed nearly Tuesday, as investors weighed in on the latest quarterly earnings reports from large U.S. companies and new data pointing to rising inflation.

The S&P 500 fell 0.4 percent, with the loss of ground for most benchmark companies. Banks, industrial stocks and companies that depend on consumer spending accounted for a large part of the decline.

Technological actions slowed the trend, which helped offset some of the broader slides. Shares of small businesses suffered some of the biggest losses.

The decline brought the main stock market indices slightly below the record highs set a day earlier. Treasury yields increased.

Investors increased their quarterly earnings reports from Goldman Sachs, JPMorgan Chase, PepsiCo and other large companies. They also got another snapshot of how inflation continues to show up in the economy, as a rapid rise in consumer demand and supply constraints translate into higher consumer goods prices.

The latest U.S. Department of Labor report showed in June another rise in consumer prices that surprised economists.

“You reported the element of incredible gains during the most recent quarter, but in some of the comments that came out there were some questions about,‘ Okay, what about cost pressures in the future? “” Said Alan McKnight, director of investment at Regions Asset Management. “Then combine that with today’s inflation report, where we see another high impression.”

The S&P 500 fell 15.42 points to 4,369.21. The Dow Jones Industrial Average fell 107.39 points, or 0.3 percent, to 34,888.79. The Nasdaq Composite Index, which has had a lot of technology, fell 55.59 points, or 0.4 percent, to 14,677.65, while the Russell 2000 index of smaller companies lost 42.96 points , or 1.9 percent, to 2,238.86.

Inflation has been a lingering concern for markets as investors try to gauge how it will affect everything from the trajectory of the economic recovery from the coronavirus pandemic to what actions the Federal Reserve will take to deal with it.

The Department of Labor said Tuesday that U.S. consumer prices rose in June to a 13-year high, extending higher inflation that has been worrying Wall Street that the Federal Reserve may consider withdrawing its rate hike policies. low interest rates and reduce your bond purchases ahead of schedule.

The U.S. Department of Labor said Tuesday that U.S. consumer prices rose to a 13-year high in June, perpetuating concerns on Wall Street that the Federal Reserve might consider dropping its rate-type policies. low interest rates and reduce bond purchases. [File: Richard Drew/AP Photo]

Much of the rise in commodity prices, such as used cars, is mainly linked to rising demand and lack of supply. But prices for many items, such as wood and other commodities, are declining or will decline as suppliers continue to increase operations, said Jamie Cox, managing partner of Harris Financial Group.

“This is a problem and it appears in all sorts of places, but it won’t be there forever,” Cox said.

Major companies opened the final round of corporate profits, with investors listening closely to how companies have fared during the recovery and how they see it unfolding the rest of the year.

Goldman Sachs fell 1.2 percent despite reporting the second-best quarterly profit in investment bank history. JPMorgan Chase fell 1.5 percent after giving investors a mixed report with solid profits but lower earnings as interest rates fell in the past three months.

“Finances have had this real final wind of rising rates,” McKnight said. “We’ve already done that. Now it’s almost a story, ‘show me.’

Conagra Brands fell 5.4% on the biggest drop in the S&P 500 after owner Chef Boyardee and other packaged food brands gave investors a weak financial forecast, citing inflationary pressures. Fastenal, a manufacturer of industrial and construction closures, also said it expects more inflationary pressure on product and transportation costs. Shares fell 1.6 percent.

Bond yields reversed since the first operation and rose to 1.42% from 1.36% last Monday. In general, yields have fallen for months after a sharp rise earlier this year.

The quieter bond market, in part, points to greater confidence that rising inflation is likely to be temporary and will be tied primarily to economic recovery.

“This narrative is pretty well anchored and the bond market isn’t afraid of the Fed lowering or raising rates,” Cox said.

Solid earnings helped some companies make a profit. PepsiCo rose 2.3% after beating Wall Street’s second-quarter earnings and revenue forecast.

Boeing fell 4.2 percent after the company announced production cuts to its large 787 aircraft due to a new structural defect in some aircraft that have been built but not delivered to airline customers .

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