Wall Street slips as weak earnings hit tech and travel stocks – News-Herald

By DAMIAN J. TROIS and ALEX VEIGA

Wall Street stocks extended their recent losing streak on Tuesday as investors scrutinized disappointing earnings reports and eagerly awaited the release of a closely watched inflation snapshot from the Federal Reserve.

The S&P 500 fell 0.4%, marking its fourth consecutive decline. The Dow Jones Industrial Average fell 0.2% and the Nasdaq 1.2%.

Small company stocks also fell, sending the Russell 2000 Index down 1.5%.

Tech companies and retailers were the biggest drags on the market, outweighing gains in energy, financial services and elsewhere. Bond yields rose overall.

The selloff likely reflects investors taking profits ahead of Wednesday’s consumer price index report, said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.

The overall figure is expected to show a smaller annual increase in July than in June, according to FactSet. But core inflation, which excludes volatile energy and food costs, leaving out rents and other large purchases, should be higher than in June.

“Underlying inflation being the larger of the two, the fact that it hasn’t peaked yet and may not peak in a few months given the momentum we’re seeing in rent increases, wage increases, that’s going to be the real problem for the Fed,” Samana said. “How do you calm this down, especially when the economy is creating as many jobs as it is?

The S&P 500 fell 17.59 points to 4,122.47. The Dow Jones slid 58.13 points to close at 32,774.41. The Nasdaq lost 150.53 points to 12,493.93. The Russell 2000 finished down 28.31 points at 1,912.89.

After a surprisingly strong 9.1% gain in July, the benchmark S&P 500 has mostly sold off this month as Wall Street tries to gauge how aggressively the Federal Reserve will continue to raise interest rates. interest in order to fight inflation and what that will mean for the economy and corporate earnings.

The US Department of Labor will release its July consumer price report on Wednesday, followed by its producer price report on Thursday. Investors and economists will be looking for any signs that the Federal Reserve’s aggressive rate hikes in recent months have helped bring inflation under control.

“Regardless of that number, there will always be an environment where they raise rates,” said Michael Landsberg, chief investment officer of Landsberg Bennett Private Wealth Management.

The Fed has hiked rates four times this year in a bid to rein in the economy and calm the highest inflation in four decades. Wall Street fears that the central bank is braking too hard and tipping the economy into a recession. Last week’s strong July jobs report led most economists to predict that the Fed will raise short-term interest rates again by up to an additional three-quarters point at its September meeting.

Most economic data already points to a slowdown. The US economy has now contracted for two consecutive quarters, which is an informal indicator of a recession. But recession fears have been tempered by a sizzling labor market with unemployment at historic lows. Although this is good for the economy, it is a sign that inflation is persisting.

Investors have also been closely watching the latest round of corporate earnings and economic data for clues about how inflation is hurting consumers and businesses.

Chipmaker Micron Technology fell 3.7% after warning investors that revenue could come in lower than expected due to weaker demand. This warning hit other chipmakers hard, with Nvidia losing 4%.

Norwegian Cruise Line plunged 10.6% for the biggest decline in the S&P 500 after announcing disappointing financial results and giving investors low earnings forecasts. Weak results weighed on travel-related stocks. Expedia fell 1.6% and American Airlines 2.7%.

As earnings season draws to a close, Disney, Wendy’s and Wynn Resorts will release their quarterly results this week.

Also on Tuesday, audience measurement firm Nielsen jumped 21.2% after reporting progress on a deal to be acquired by private equity firms.

Bond yields have risen. The 10-year Treasury yield rose to 2.79% from 2.75% on Monday evening.