{"id":114198,"date":"2021-05-12T21:23:42","date_gmt":"2021-05-12T21:23:42","guid":{"rendered":"https:\/\/fin2me.com\/?p=114198"},"modified":"2021-05-12T21:23:42","modified_gmt":"2021-05-12T21:23:42","slug":"wall-street-ends-with-broad-sell-off-on-spiking-inflation-fears","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/wall-street-ends-with-broad-sell-off-on-spiking-inflation-fears\/","title":{"rendered":"Wall Street ends with broad sell-off on spiking inflation fears"},"content":{"rendered":"

NEW YORK (Reuters) – Wall Street closed lower on Wednesday with the S&P suffering its biggest one-day percentage drop since February, as inflation data fueled concerns over whether interest rate hikes from the Fed could happen sooner than anticipated.<\/p>

FILE PHOTO: The front facade of the New York Stock Exchange (NYSE) is seen in New York City, U.S., May 4, 2021. REUTERS\/Brendan McDermid<\/figcaption>

All three major U.S. stock indexes ended the session deep in the red following the Labor Department\u2019s April consumer prices report, which showed the biggest rise in nearly 12 years.<\/p>\n

The report was hotly anticipated by market participants who have grown increasingly worried over whether current price jumps will defy the U.S. Federal Reserve\u2019s reassurances by morphing into long-term inflation.<\/p>\n

But pent-up demand from consumers flush with stimulus and savings is colliding with a supply drought, sending commodity prices spiking, while a labor shortage drives wages higher.<\/p>\n

\u201cThe topic on everyone\u2019s mind is obviously inflation,\u201d said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts. \u201cIt\u2019s something the (Fed) has been looking for and they\u2019re finally getting their wish.\u201d<\/p>\n

\u201cThe question is how long will its fires run hot before starting to simmer?\u201d<\/p>\n

That concern is shared by Stuart Cole, head macro economist at Equiti Capital in London.<\/p>\n

\u201cGoing forward, the big question is just how long can the Fed maintain its dovish stance in opposition to the markets,\u201d Cole said. \u201cParticularly if companies begin raising wages to encourage unemployed labor back into the workforce, in turn driving a large hole in the Fed\u2019s transitory inflation argument.\u201d<\/p>\n

Core consumer prices (CPI), which exclude volatile food and energy items, grew at 3% year-on-year, shooting above the central bank\u2019s average annual 2% inflation growth target.<\/p>\n

(Graphic on inflation) tmsnrt.rs\/3we4MO7<\/p>\n

The Dow Jones Industrial Average fell 681.5 points, or 1.99%, to 33,587.66, the S&P 500 lost 89.06 points, or 2.14%, to 4,063.04 and the Nasdaq Composite dropped 357.75 points, or 2.67%, to 13,031.68.<\/p>\n

Of the 11 major sectors in the S&P 500, 10 closed in negative territory, with consumer discretionary down most.<\/p>\n

Energy was the sole gainer, advancing 0.1%, boosted by rising crude prices. [O\/R]<\/p>\n

Market-leading mega-caps, including Amazon.com Inc, Apple Inc, Alphabet Inc, Microsoft Corp and Tesla Inc, fell between 2% and 3% as investors shied away from what many feel are stretched valuations.<\/p>\n

\u201cThe CPI number being stronger than expected has led to further weakness in tech stocks,\u201d said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. \u201cTech investors are concerned that higher rates are going to lead to multiple compression and less attractive valuations for tech names in a higher rate environment.\u201d<\/p>\n

The CBOE Volatility index, a gauge of market anxiety, close at 27.64, its highest level since March 4.<\/p>\n

Online dating platform Bumble Inc gained in after-hours trading after posting quarterly results.<\/p>\n

First-quarter earnings season is on the wane, with 456 constituents of the S&P 500 having reported. Of those, 86.8% have beaten consensus estimates, according to Refinitiv IBES.<\/p>\n

Declining issues outnumbered advancing ones on the NYSE by a 6.05-to-1 ratio; on Nasdaq, a 3.84-to-1 ratio favored decliners.<\/p>\n

The S&P 500 posted nine new 52-week highs and no new lows; the Nasdaq Composite recorded 34 new highs and 118 new lows.<\/p>\n

Volume on U.S. exchanges was 11.82 billion shares, compared with the 10.44 billion average over the last 20 trading days.<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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