Investors will focus on inflation data Tuesday against a backdrop of the Federal Reserve considering the end of its Covid-19 pandemic-era programs.
Daniel Slim/AFP via Getty Images
The Dow Jones Industrial Average was falling on Tuesday while global stocks were mixed, after the release of key U.S. inflation data.
In morning trading, the Dow fell189 points, or 0.6% after the index rose 261 points on Monday, reversing five consecutive days of losses. The S&P 500 was down 0.4%, while the Nasdaq Composite was falling 0.2%. All three indexes had been higher at the market open.
Consumer prices increased 0.3% month-over-month in August, while core CPI rose 0.1%. Expectations were for CPI to rise 0.4% in August, down from 0.5% in July. Compared with the same period last year, inflation rose 5.3%, as companies raise prices to cover higher costs.
While the August reading was cooler than expected, inflation remains strong, which could force the Federal Reserve to lift interest rates sooner than currently anticipated. Plus, higher corporate taxes—which House Democrats have now formally proposed—could bring earnings per share estimates down.
The S&P 500, down almost 2% from its all-time high hit Sep. 2, could quickly fall another 0.1%, according to Instinet technical analysts, who say that the index’s inability to move above 4,475 is troublesome in the near-term.
“With the inflation read coming in lighter than expected, there’s a glimmer of hope that prices are finally beginning to normalize, but we’re far from fully out of the woods when it comes to supply chain issues and raw material shortages,” wrote Mike Loewengart, managing director of investment strategy at ETrade.
The 10-year Treasury yield slipped to 1.28% from 1.34%.
In commodity markets, oil prices moved higher as the crude rally continued. International benchmark Brent crude futures were changing hands around $74 a barrel, while futures for the U.S. benchmark, West Texas Intermediate, neared $71 a barrel.
Overseas, the Chinese technology sector remained under pressure from the reported planned breakup of major payments app Alipay by regulators, with the Shanghai Composite down 1.4% and Hong Kong’s Hang Seng Index falling 1.2%. The pan-European Stoxx 600 was up 0.2%.
Here are 10 stocks on the move Tuesday:
Luxury-goods stocks like LVMH, Burberry, Kering, and Richemont were all lower, as analysts noted concerns over rising Covid-19 cases in Asia. Consumers in China, Japan, and other countries in the region are critical to these companies’ sales and growth. LVMH was down 1.4% in London, Burberry down 1.8% in London, Kering down 3.5% in Paris, and Richemont down 1.9% in London.
Apple (ticker: AAPL) stock was up 0.1% ahead of the launch event for the newest iPhones.
Oracle (ORCL) stock was falling 3.8% after reporting a profit of $1.03 a share, beating estimates of 97 cents a share, on sales of 9.73 billion, below expectations for $9.77 billion. Barron’s Eric Savitz wrote that the company guided for higher quarterly earnings per share than analysts had expected.
Herbalife Nutrition (HLF) stock dropped 15.2% after the company said its third quarter and full year sales and profits will come in lower than initially expected. The company still expects 21% sales growth over the same quarter in 2019 and lowered its full year earnings per share guidance to $4.75 from $4.90.
Boeing (BA) stock slipped 1.1% after the company said the commercial airplanes and services businesses are recovering from their pandemic disruptions.
CureVac N.V. (CVAC) stock fell 6.4% after the company announced it is terminating a part of its manufacturing process for its Covid-19 vaccine.
Coinbase (COIN) stock was 0.7% higher. The stock fell more than 2% Monday after announcing a $1.5 billion bond sale.
Write to Jacob Sonenshine at jacob.sonenshine@barrons.com
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