Shares Close Lower, Falling Below Recent Records | national

Major US stock indices closed largely lower on Thursday, retreating further from record highs they reached earlier in the week.

The S&P 500 fell 0.3% after losing an early gain. The benchmark is now poised to experience its first weekly loss in four weeks.

Tech and communications stocks, as well as companies that rely on consumer spending, were behind much of the pullback, outweighing gains elsewhere in the market. Energy stocks fell on the back of a large drop in energy prices. Among the winners were financials, especially banks, which for the most part reported strong earnings.

Bond yields have fallen. The yield on the 10-year Treasury bill slipped to 1.30% from 1.35% the day before.

Investors continued to focus on where the economy is heading as the pandemic eases and what businesses have to say about how rising inflation is affecting their businesses.

“As long as inflation ends up being transient, as the Fed believes, the economy should continue to do well,” said Chris Gaffney, chairman of TIAA Bank World Markets. “The big risk is that inflation will skyrocket and stay here.”

The S&P 500 lost 14.27 points to 4,360.03. The tech-rich Nasdaq slipped 101.82 points, or 0.7%, to 14,543.13. The Dow Jones Industrial Average reversed the trend and rebounded after being down much of the day. The blue chip index gained 53.79 points, or 0.2%, to 34,987.02.

Small business shares also fell. The Russell 2000 Index lost 12.07 points, or 0.6%, to 2,190.29.

Thursday, the chairman of the Federal Reserve Jerome Powell delivered his second day of testimony before Congress. Powell reiterated that signs of inflation are expected to ease or reverse over time, while acknowledging that the United States is in the midst of an unprecedented economic reopening in the wake of a pandemic-induced recession. .

The government said on Wednesday that wholesale inflation jumped 1% in June, pushing price gains over the past 12 months to a record 7.3%. This followed a report released a day earlier showing consumer prices were the biggest 12-month increase in 13 years.

Investors are also trying to determine how the economic recovery will play out for the rest of the year as the world tries to get back to normal with the decline of COVID-19, but still lingering.

“There is a big question mark surrounding the transition of COVID-19 from acute disease to chronic disease for the global market,” said Rod von Lipsey, managing director of UBS Private Wealth Management.

While the virus and its variants are unlikely to seriously disrupt economic recovery, expectations of a quick comeback have been hampered by persistent mutations, he said.

New data on unemployment benefit claims indicate that the labor market continues to improve. The Labor Ministry said Thursday that unemployment claims fell from 26,000 last week to 360,000, the lowest level since the pandemic struck last year.

Other companies released their latest quarterly results Thursday. Progressive fell 2.6% after the insurance company’s results fell short of analysts’ forecasts. Morgan Stanley rose 0.2% after reporting a 10% increase in quarterly profits from a year earlier.

More companies will start reporting next week, when earnings season is in full swing.

American International Group, better known as AIG, rose 3.6% after the insurance company struck a deal with Blackstone Group to help it manage some of its life insurance assets.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.


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Mary Moser

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