Wall Street’s Record Climb Loses Steam and GE Surges

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On Tuesday, US stock indexes fell from record highs due to increasing concerns about inflation after last month saw a major increase in producer prices. In contrast, General Electric climbed on news of its plans to divide into three public companies. The producer prices data of the Labor Department indicates high inflation and this has become a prominent concern for investors, one that is even bigger than the coronavirus pandemic. Moreover, it is likely going to persist for some time, particularly due to supply chain issues. Market experts said that most investors are beginning to realize that inflation is increasing. 

Even though it may not be increasing as quickly as it was expected, but it is still rising. In early trading on Tuesday, six of the total 11 major indexes of the S&P 500 sector were trading lower, with energy and financials experiencing the biggest drop. The Nasdaq and the S&P 500 had closed on Monday at all-time highs for the eighth session in a row, whereas the Dow had reached its second closing high in a row. Some experts said that Tuesday’s fall was just a bit of profit-taking from Monday. Since interest rates still remain favorable, the environment is not that bad.

The market has managed to continue its record high because of good news regarding the COVID-19 antiviral drugs, an earnings session that turned out to be better-than-expected and the loosening of travel restrictions. There was a 5.4% surge in General Electric Co shares, after the announcement of the US conglomerate regarding its plans of splitting itself into three divisions that would focus on healthcare, aviation, and power. There was a 4.6% fall in Tesla Inc., which extended the declines of the last session after the Twitter poll of Elon Musk, the company’s chief executive.

Musk’s poll about selling 10% of his holdings had received a vote of 57.9% who were in favor of it. The proposal also gave rise to questions about whether the CEO had violated his settlement once more with the US securities regulator. The Dow Jones had declined by 0.30% or by 109.98 points to reach a value of 36,322.24, whereas the S&P 500 saw a fall of 0.22% or 10.15 points to reach 4,691.55. The Nasdaq composite, on the other hand, had reduced by 0.34% or 54.66 points to reach 15,927.70. There was a 3.1% fall in Robinhood Markets Inc. after the online retail broker said that five million customers had had their email addresses exposed to a third party due to a security breach.

There was a 4.9% increase in Zyga Inc. after the creator of ‘Farmville’ managed to beat estimates of quarterly net bookings. TripAdvisor, on the other hand, saw a fall of 8.5% after it reported downbeat quarterly earnings and announced that Stephen Kaufer, the Chief Executive Officer, was leaving. The S&P 500 index did not see any new lows, whereas there were 25 new highs over a 52-week period. At the same time, Nasdaq recorded 34 new lows while there were 54 new highs. 

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