4 minutes, by Read (Click LIVE/ or type LIVE/ in a news window for a Reuters live blog on U.S., UK, and European financial markets.) * JPMorgan falls as its trading business loses its luster. * Consumer prices in the United States rose in June* Boeing dips due to new 787 Dreamliner production issues* Dow down 0.06 percent, S&P up 0.13 percent, Nasdaq up 0.43 percent (Comments and details are added, and prices are updated throughout.) Reuters, July 13 – On Tuesday, the S&P 500 and the Nasdaq reached new highs, boosted by a gain in mega-cap firms and a strong start to the earnings season, but consumer prices rose sharply in June, dampening optimism. Only four of the 11 major S&P 500 sector indexes were trading higher, with the technology sector climbing 1.1 percent to a record high, led by heavyweights Apple Inc and Microsoft Corp. After statistics indicated that U.S. consumer prices grew by the highest in 13 years last month, growth stocks got a boost from a drop in the benchmark 10-year Treasury yield. The so-called core CPI rose 4.5 percent on a year-over-year basis, the most since November 1991, after soaring 3.8 percent in May. “The big concern on everyone’s mind right now is how long these hot inflation statistics will endure,” said Mike Loewengart, managing director of E*TRADE Financial’s investing strategy. “With each succeeding high inflation reading, the Federal Reserve will find it increasingly difficult to stay flexible.” Investors are concerned that an overheating economy as a result of the speedier reopening may force the Fed to tighten its ultra-loose monetary policies sooner than expected. Energy, financials, and materials, all of which are tied to the economy, were the worst performers, losing more than 1% apiece. Even though JPMorgan Chase & Co and Goldman Sachs Group Inc posted better-than-expected quarterly earnings, rate-sensitive banks sank 2.0 percent. Following last year’s record-breaking trading results, JPMorgan saw a well-publicized slowdown. PepsiCo Inc rose 2.6 percent after upgrading its full-year earnings outlook, banking on stronger demand as COVID-19 limitations are eased. “We already know that the second quarter will be a record-breaking earnings season. Is it possible that we’ve reached the pinnacle of both incomes and economic growth?” BMO Global Asset Management’s senior investment strategist, Jon Adams, stated. “Equity values are mostly based on earnings strength, so if earnings continue to surprise on the upside or exceed forecasts, that should be favorable for equities.” According to Refinitiv statistics, S&P 500 earnings per share are forecast to grow roughly 66 percent in the June quarter, with market participants questioning how long Wall Street’s surge would persist after the benchmark index has risen about 17 percent this year. All eyes will be on Fed Chair Jerome Powell’s congressional hearing on Wednesday and Thursday, where he will discuss rising pricing pressures and future monetary support. The Dow Jones Industrial Average was down 21.92 points, or 0.06 percent, at 34,974.26, the S&P 500 was up 5.66 points, or 0.13 percent, at 4,390.29, and the Nasdaq Composite was up 63.97 points, or 0.43 percent, at 14,797.21. At 12:05 p.m. ET, the Dow Jones Industrial Average was down 21.92 points, or 0.06 percent, at 34,974.26, the S&P 500 Conagra Brands Inc fell 4.3 percent as the packaged foods business warned that higher raw material and ingredient costs will eat into its profit this year more than expected. The stock of Boeing Co dropped 3.3 percent after the Federal Aviation Administration announced late Monday that some undeliverable 787 Dreamliners have a new manufacturing quality issue. On the NYSE, decliners outweighed advancers by 1.92-to-1, while on the Nasdaq, decliners outnumbered advancers by 2.17-to-1. The S&P 500 index hit 39 new 52-week highs and made no new lows, while the Nasdaq hit 54 new highs and 42 new lows. (In Bengaluru, Devik Jain and Shreyashi Sanyal reported; Arun Koyyur and Maju Samuel edited.)/n
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