The S&P 500 fell for the first time in 9 sessions on Tuesday as investors took some profits after an October rally and awaited key inflation data ahead Wednesday.
Tesla shares dropped 7% as investors sold the leader of the bull market run. PayPal led the losses in financial stocks after the company issued disappointing guidance.
The S&P 500 retreated 0.5%. The Dow Jones Industrial Average shed about 180 points, or 0.5%. The Nasdaq Composite ticked down 0.6%.
All three major averages rose to new highs Monday. The S&P 500 on Monday posted its 64th record close of the year and eighth straight positive day — its longest winning streak since April 2019. The broad equity index is up more than 24% in 2021.
PayPal on Tuesday was the biggest laggard on the S&P 500 and Nasdaq Composite, sinking more than 10%. The digital payments company missed on quarterly revenue expectations and issued weaker-than-expected fourth-quarter and full-year guidance.
On the upside, shares of GE rallied roughly 6% after the industrial giant announced it will split into three public companies focusing on aviation, healthcare and energy. The stock led gains on the S&P 500.
The October producer price index rose 0.6% month over month, the Labor Department said Tuesday, in line with the Dow Jones consensus estimate. Still, wholesale prices jumped 8.6% in October from a year ago, the hottest annual pace on record in nearly 11 years.
Investors are awaiting the release of another key inflation reading Wednesday. The closely watched October consumer price index is also expected to show a 0.6% jump compared to the prior month.
“Bottom line, while today’s data was as expected, the numbers are certainly eye opening in terms of the pace of gains,” Bleakley Advisory Group CIO Peter Boockvar said in a note.
Strong earnings results have also supported stocks in running to new highs. Through Tuesday morning, 459 companies in the S&P 500 have reported quarterly results, with 81% beating earnings estimates.
“With Q3 earnings season winding down, economic data and the progress in economic re-openings will gain in importance in investors’ focus from here to the end of the year,” noted John Stoltzfus, chief investment strategist at Oppenheimer Asset Management.
Leave a Reply