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Stock market news live updates: Stocks drop as inflation concerns overshadow strong retail earnings; Dow sheds 211 points, or 0.6% – Yahoo Finance

Summary

Stocks were mostly lower Wednesday to hover below record levels, as investors digested a set of solid corporate earnings results from more major retailers. 

The S&P 500, Dow and Nasdaq were slightly lower. Tesla (TSLA) shares bucked the trend of the market and extended gains, after jumping 4% on Tuesday. Peloton (PTON) shares fell after surging by nearly 16% on Tuesday in its best day since May 2020, after the company announced a secondary stock offering that would net more than $1…….

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Stocks were mostly lower Wednesday to hover below record levels, as investors digested a set of solid corporate earnings results from more major retailers. 

The S&P 500, Dow and Nasdaq were slightly lower. Tesla (TSLA) shares bucked the trend of the market and extended gains, after jumping 4% on Tuesday. Peloton (PTON) shares fell after surging by nearly 16% on Tuesday in its best day since May 2020, after the company announced a secondary stock offering that would net more than $1 billion. 

Despite the mild pullback on Wednesday, stocks remained close to record levels. Better-than-expected economic data, with retail sales growing by the most since March in October, and strong earnings results from major companies including Walmart (WMT) and Home Depot (HD) helped buoy the broader markets in recent sessions. The latest earnings results from Target (TGT) and Lowe’s (LOW) on Wednesday showed continued strength, albeit alongside some lingering concerns over the impacts of supply-side disruptions and rising input costs. 

Target posted better-than-expected third-quarter sales and earnings per share as customer traffic picked up both in-stores and online, but the report also showed that supply chain snarls and rising labor costs were weighing on margins. This echoed tones from Walmart executives, who during their earnings call on Tuesday also said that they were “seeing inflationary cost pressures in some areas” but were working with suppliers to “manage margins appropriately.” Lowe’s, meanwhile, posted stronger-than-expected sales and raised its full-year revenue guidance, suggesting demand for home-improvement projects was holding up. 

The general strength of corporate earnings for the latest quarter has helped investors at least temporarily look beyond concerns over still-elevated inflation. And indeed, some of the growth in Tuesday’s retail sales report likely stemmed from rising prices, given that the Commerce Department reports retail sales nominally. 

Despite these inflationary concerns and the potential impacts of rising prices on corporate profits and spending, stocks have hovered near record highs. The S&P 500 was within 0.5% of its all-time intraday high by Tuesday’s close. And according to some strategists, these moves suggest markets may be warming to the notion that inflationary pressures will ultimately moderate below current levels. 

“The markets generally are looking at it benignly – they are not discounting some longer-term inflation of more than, let’s say, 2.5%,” Steven Wieting, Citi Global Wealth chief investment strategist, told Yahoo Finance Live. “You can see this in the pricing out on the yield curve of Treasuries. You can see this in the composition of the market with growth stocks not really being beaten down by any concerns about some lurch higher, tightening of monetary policy. We think that story is largely correct – it’s benign for markets. It doesn’t mean we get to repeat the returns the past year, however.”

4:05 p.m. ET: Stocks drop as inflation concerns overshadow strong retail earnings; Dow sheds 211 …….

Source: https://finance.yahoo.com/news/stock-market-news-live-updates-november-17-2021-231252389.html

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