Stocks

Wall Street closes lower as inflation fears prompt tech sell-off

Reuters | Updated on May 11, 2021

Dow slips 0.10%, S&P down 1.04% and Nasdaq was down 2.55%

Wall Street closed lower on Monday as inflation jitters drove investors away from growth stocks in favour of cyclicals, which stand to benefit most as the economy reopens.

Industrial and healthcare shares limited the Dow's decline but the blue-chip average reversed course late in the session to snap a three-day streak of record closing highs.

A demand resurgence is colliding with strained supply ofbasic materials, helping to fuel inflation worries.

Inflation concerns will be in the minds of investors whenthe Labor Department releases its latest CPI report on Wednesday.

A shutdown to halt a ransomware attack on the ColonialPipeline entered its fourth day, hobbling a network which transports nearly half of the East Coast's fuel supplies.

The Dow Jones Industrial Average fell 34.94 points,or 0.1%, to 34,742.82, the S&P 500 lost 44.17 points, or1.04%, to 4,188.43 and the Nasdaq Composite dropped350.38 points, or 2.55%, to 13,401.86.

Of the 11 major sectors in the S&P 500, six closed red. Tech was the biggest loser, sliding 2.5%.

First-quarter reporting season has entered the home stretch,with 439 of the companies in the S&P 500 having reported as ofFriday. Of those, 87% have beaten consensus expectations,according to Refinitiv IBES.

Analysts now see year-on-year S&P earnings growth of 50.4%on aggregate, more than double the rate forecast at thebeginning of April and significantly better than the 16%first-quarter growth expected on January 1, per Refinitiv

Hotel operator Marriott International Inc missed quarterly profit and revenue expectations due to weak US bookings which offset a rebound in China. Its shares fell 4.1%.

After the bell, its rival Wynn Resorts Ltd missedquarterly earnings and revenue estimates. Its shares were up in after-hours trading.

Electric vehicle stocks put on the brakes, with Tesla Incdown 6.4% and Fisker off 9.0% after Workhorse Group missed quarterly revenue expectations. Workhorse lost 14.9% on the day.

FireEye rose 1.2% after industry sources identifiedthe cybersecurity firm as among those helping Colonial Pipelinerecover from the recent cyberattack.

Declining issues outnumbered advancing ones on the NYSE by a1.88-to-1 ratio; on Nasdaq, a 3.24-to-1 ratio favored decliners.

The S&P 500 posted 223 new 52-week highs and no new lows;the Nasdaq Composite recorded 208 new highs and 148 new lows.

Published on May 11, 2021

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