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Tags: Financial Markets | Infrastructure | Money | Financial Markets

Stocks Open Lower on Wall Street, Led by Weakness in Tech

Wall Street
Technology stocks are opening weaker on Wednesday, Nov. 10, 2021, bringing down major indices with them. (AP)

Wednesday, 10 November 2021 10:15 AM

Stocks are off to a weak start on Wall Street Wednesday, pulled down by losses in big technology companies. The S&P 500 was down 0.4% in the early going, and the tech-heavy Nasdaq lost 0.8%. Chipmakers Nvidia and AMD each fell more than 3%.

Inflation Hits 6.2%

Investors were discouraged to see a reading on inflation that came in hotter than expected, and Treasury yields rose as a result. Consumer prices rose 6.2% in October over a year ago, the highest inflation rate since 1990. DoorDash soared 16% after reporting suprisingly strong results.

Overseas, shares opened higher in Europe after mostly falling in Asia, as China, like the U.S., reported that its inflation surged in October. While benchmarks were higher in London, Paris and Hong Kong, they fell in Tokyo and Shanghai.

China’s inflation rose 1.5% in October, more than double from 0.7% the month before, the National Bureau of Statistics reported. The surge to a 13-month high was driven mainly by a jump in prices for food and fuel, it said. China's producer prices, or wholesale prices, climbed 13.5%, adding to worries that price pressures might limit the central bank’s ability to adjust its policies to bolster growth.

Chinese markets initially fell following the report, though Hong Kong's Hang Seng recovered from early losses, gaining 0.7% to 24,996.14. The Shanghai Composite index also trimmed its morning losses but still ended 0.4% lower at 3,492.46.

In early European trading, Britain's FTSE 100 climbed 0.4% to 7,300.26 while the CAC 40 in Paris edged 0.1% higher to 7,050.02. Germany's DAX was nearly unchanged at 16,041.62.

The futures for the S&P 500 and the Dow industrials both edged 0.1% lower. The yield on the 10-year Treasury rose to 1.47% from 1.44% late Tuesday.

Elsewhere in Asia, Tokyo’s Nikkei 225 lost 0.6% to 29,106.78 and the Kospi in South Korea declined 1.1% to 2,930.17. Australia’s S&P/ASX 200 gave up 0.1% to 7,423.90. Shares rose in India and Taiwan.

The specter of stubbornly high inflation has haunted the markets for months and China's latest data added to signs it is not dissipating quickly.

Fed, Others Call Inflation Manageable

But the latest numbers were exaggerated by low comparative data from last year and underlying price pressures remain low, Julian Evans-Pritchard of Capital Economics said in a report.

“We continue to think that consumer price inflation will remain below 2% in the coming quarters and that inflation is unlikely to be a major constraint on the PBOC’s ability to loosen monetary policy," Evans-Pritchard said, echoing sentiments that Federal Reserve Chairman Jerome Powell. He, regional Fed presidents and governors have said that the current spike in inflation is transitory.

On Tuesday, stocks ended moderately lower on Wall Street, breaking an eight-day winning streak that had been fueled by strong company earnings and economic data.

The S&P 500 index lost 0.4%, the Dow Jones Industrial Average fell 0.3% and the Nasdaq lost 0.6%.

Investors Not Ignoring Inflation

Inflation is weighing on U.S. market sentiment as well: the Labor Department reported Tuesday that inflation at the wholesale level rose 8.6% in October from a year earlier, matching September’s record annual gain.

The Labor Department will release its Consumer Price Index for October on Wednesday, giving a more detailed picture on how inflation is impacting consumers.

Many industries are facing higher costs for raw materials and energy while contending with supply chain problems. That has been cutting into their operations and prompting them to raise prices on finished goods, which in turn has been making products and services more costly for consumers.

The latest round of earnings is nearing its end, but investors still have several big corporate report cards to review. Walt Disney will report its results on Wednesday. Tapestry, the owner of Coach and other luxury brands, will report its results on Thursday.

Benchmark U.S. crude oil gained 3 cents to $84.19 per barrel in electronic trading on the New York Mercantile Exchange. It jumped $2.22 on Tuesday. Brent crude, the basis for international pricing, added 47 cents to $85.25 per barrel.

The U.S. dollar rose to 113.14 Japanese yen from 112.86 yen. The euro weakened to $1.1570 from $1.1595.

© Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Stocks are off to a weak start on Wall Street Wednesday, pulled down by losses in big technology companies.
Financial Markets
Wednesday, 10 November 2021 10:15 AM
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