Stock indexes mixed as tech rebound fades; Peloton sinks
Major U.S. stock indexes closed mixed Wednesday after an early technology-company rebound faded, tempering the market’s recovery from a sell-off a day earlier.
The Standard & Poor’s 500 index eked out a 0.1% gain after having been up 0.7% in the early going. The Dow Jones industrial average managed a 0.3% gain, while the tech-heavy Nasdaq slid 0.4%.
Financial and energy stocks helped keep the S&P 500 out of the red. JPMorgan Chase rose 1.3% and Exxon Mobil added 3%. Losses for retailers and other companies that rely primarily on consumer spending kept those gains in check, as did a pullback in utilities.
Technology stocks, which led the market’s blockbuster rebound in 2020, fell for the seventh straight day. The sector, one of 11 in the S&P 500, is up 4.6% this year, the third-smallest gain in the index after consumer staples and utilities. Energy companies are faring the best with a 38.1% gain this year.
With soundstages in short supply and production on the rise, a developer plans to build a new studio in Hollywood.
The market’s mixed results came as investors remain focused on earnings reports, which have been better than expected. More than half of the companies in the S&P 500 have reported their results this earnings season, which show profit growth of 54%, according to FactSet.
The S&P 500 added 2.93 points to close at 4,167.59. The benchmark index hit an all-time high last Thursday. The Dow rose 97.31 points to 34,230.34, while the Nasdaq dropped 51.08 points to 13,582.42. The Russell 2000 index of small-company stocks lost 6.92 points, or 0.3%, to end at 2,241.37.
Stocks had been mostly pushing higher on expectations of an economic recovery and strong company profits this year as large-scale coronavirus vaccination programs help people return to jobs and normal activities after more than a year of restrictions. Massive support from the U.S. government and the Federal Reserve, and increasingly positive economic data, also have helped put investors in a buying mood, keeping stock indexes near their all-time highs.
Still, investors remain concerned about the potential for higher inflation, signs of which are already cropping up as higher prices for oil, lumber and other commodities. Remarks by Treasury Secretary Janet L. Yellen suggesting that the Federal Reserve would have to raise interest rates to keep the economy from overheating led to a late-afternoon sell-off Tuesday.
General Motors shares rose 4% after the company posted a solid quarterly profit compared with a year earlier, but also affirmed its full-year outlook even as the automaker — like much of its competition — contends with a chip shortage that is hurting production.
Under Armour jumped 6.9% after the athletic apparel company reported better-than-expected results. Traders also cheered video game maker Activision Blizzard’s latest quarterly report card, driving shares 1.6% higher.
Caesars Entertainment vaulted 7.8% for the biggest gain in the S&P 500 after the hotel and casino giant said more people are booking rooms as they get vaccinated and feel comfortable traveling and going out.
Facebook’s vaunted Oversight Board just punted on its most important decision.
Facebook shares fell 1% after the company announced its independent oversight board would continue to ban former President Trump from the platform. Trump’s account had been suspended indefinitely after the Jan. 6 insurrection at the capital, where his rhetoric has been blamed for the riots. The board did say that the company must decide whether the ban is permanent.
Shares of exercise equipment company Peloton Interactive skidded 14.6% after the company voluntarily recalled its treadmills after dozens of reports of injuries to children and pets, and at least one death. The $4,200 treadmill was the company’s biggest expansion beyond its traditional exercise bike program.
After digging in its heels and refusing to recall its Tread+ exercise machine, Peloton now says it will recall the treadmill and expressed remorse.
Later this week, investors’ attention will turn to the jobs report for April. Economists expect the data to show employers hired 975,000 workers last month as the economy accelerated out of the pandemic and vaccines rolled out nationwide. The unemployment rate is expected to drop to 5.8% from 6%.
A private-sector jobs report released by payroll processing company ADP found that private employers created 742,000 jobs last month, which was less than the 896,000 jobs that were expected by economists.
The 10-year Treasury note traded Wednesday at a yield of 1.57%, down from 1.59% late Tuesday.
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