NEW YORK CITY, RAW – US stock indexes have retreated from record highs 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 realise 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 favourable so it’s not a bad environment to be in,” Pavlik said.
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 per cent after the US conglomerate said it would split itself into three companies focused on aviation, healthcare and power.
Tesla Inc shed 4.6 per cent, 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 per cent vote in favour of the sale.
The proposal also raised questions about whether Musk may have violated his settlement with the US securities regulator again.
In early trading, the Dow Jones Industrial Average was down 109.98 points, or 0.30 per cent, at 36,322.24, the S&P 500 was down 10.15 points, or 0.22 per cent, at 4,691.55 and the Nasdaq Composite was down 54.66 points, or 0.34 per cent, at 15,927.70.
Robinhood Markets Inc slipped 3.1 per cent after the online retail brokerage said a third party had obtained access to the email addresses of about five million of its customers in a security breach incident.
Zynga Inc jumped 4.9 per cent after the FarmVille creator beat quarterly net bookings estimates while Tripadvisor Inc fell 8.5 per cent after reporting downbeat quarterly earnings and announcing the departure of Chief Executive Officer Stephen Kaufer.
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.