Key Takeaways
U.S. equities sank as a report on wholesale prices became the third in the past three days pointing to higher-than-expected inflation. The jump in the Producer Price Index (PPI), along with the earlier data on consumer prices and retail sales, raised concerns the Fed might not ease off its monetary tightening policies anytime soon. The selling intensified in the last hour of trading, sending the Dow, S&P 500, and Nasdaq tumbling more than 1%.
The losses were broad-based, with 28 of the 30 stocks in the Dow losing ground. Walt Disney (DIS) shares led the decline, dipping 3%. Shares of Amgen (AMGN), Boeing (BA), Intel (INTC), Microsoft (MSFT), and Nike (NKE) dropped 2%. Shares of tech and home building firms, which are sensitive to rising borrowing costs, turned lower. Tesla (TSLA) shares lost 5% as the electric carmaker recalled more than 362,000 vehicles because a glitch in its self-driving software could cause accidents.
Organon (OGN) shares plummeted after the pharmaceutical firm posted profit that missed estimates. Paramount Global’s (PARA) earnings also were short of forecasts on weak ad sales, and its shares sank.
Following the release of their earnings reports, shares of Host Hotels & Resorts (HST) and NRG Energy (NRG) tumbled. Moderna (MRNA) said that its COVID-19 vaccine will remain free for all Americans after the pandemic emergency is over, and its shares slid.
Cisco Systems (CSCO) shares were up 5% as the networking equipment maker had better-than-expected quarterly results and profit guidance, and boosted its dividend. In the S&P 500, the leader was West Pharmaceuticals Services (WST), as its results and outlook also exceeded forecasts.
Soaring Lithium Sales
Albemarle (ALB) shares took off as the lithium producer had a five-fold jump in sales of the metal used in electric vehicle (EV) batteries and said that it anticipates a big jump in demand as China ramps up EV production. Shares of DocuSign (DOCU) rose after the company announced another round of layoffs as demand for its electronic signature software slows following the pandemic lockdown boom. Other than Cisco Systems, Home Depot (HD) was the only stock in the Dow to be in the green.
The yield on the 10-year Treasury note advanced. Oil futures slipped, while gold futures registered a small gain. The U.S. dollar was higher versus the euro and pound but fell against the yen. Prices for major cryptocurrencies continued to climb on indications that government regulations planned for the industry may not be as stringent as anticipated.
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