Wall Street’s high record run retreats as GE surges on split
U.S. stock indexes retreated from record highs on Tuesday as a solid rise in producer prices last month deepened concerns over inflation, while General Electric surged on its plan to split into three public companies.
The Labor Department producer prices data indicated high inflation, which has become a bigger concern for investors than the COVID-19 crisis, could persist for a while amid supply chain issues.
“I think most investors realize right now that inflation is on the rise. It’s not growing as quick as it was once feared, but it’s still on the rise,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
Six of the 11 major S&P 500 sector indexes were lower in early trading, with financials and energy dropping the most.
The S&P 500 and the Nasdaq closed at all-time highs on Monday for the eighth straight session, while the Dow clocked its second consecutive record closing high.
“I think what you’re seeing is just a little bit of profit-taking from yesterday. Interest rates are still really favorable, so it’s not a bad environment to be in,” Pavlik said.
Stocks on Wall Street ended slightly higher on Monday, gaining early in the day as investors cheered passage of a U.S. infrastructure spending bill, but paring gains late as sliding Tesla shares weighed the indexes down. Fred Katayama reports.
A better-than-expected earnings season, positive news around COVID-19 antiviral pills and the loosening of travel curbs have recently helped the market continue its record run.
General Electric Co shares jumped 5.4% after the U.S. conglomerate said it would split itself into three companies focused on aviation, healthcare and power.
Tesla Inc shed 4.6%, extending declines from the previous session after Chief Executive Officer Elon Musk’s Twitter poll proposing to sell a tenth of his holdings garnered a 57.9% vote in favor of the sale.
The proposal also raised questions about whether Musk may have violated his settlement with the U.S. securities regulator again.
At 9:54 a.m. ET, the Dow Jones Industrial Average was down 109.98 points, or 0.30%, at 36,322.24, the S&P 500 was down 10.15 points, or 0.22%, at 4,691.55 and the Nasdaq Composite was down 54.66 points, or 0.34%, at 15,927.70.
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Declining issues outnumbered advancers for a 1.08-to-1 ratio on the NYSE and a 1.89-to-1 ratio on the Nasdaq. The S&P index recorded 25 new 52-week highs and no new lows, while the Nasdaq recorded 59 new highs and 34 new lows.
(Reporting by Shreyashi Sanyal and Devik Jain in Bengaluru; Editing by Bernard Orr and Aditya Soni)
