S&P 500 hovers near record, GE jumps on break-up plan

U.S. stocks were slightly lower Tuesday, hovering near records as investors digested new inflation data.

The Dow Jones Industrial Average shed about 85 points, or 0.2%. The S&P 500 dipped 0.1% and the Nasdaq Composite ticked down 0.2%.

Wholesale prices jumped 8.6% in October from a year ago, the hottest annual pace on record in nearly 11 years, the Labor Department said Tuesday. The October producer price index rose 0.6% month over month, in line with the Dow Jones consensus estimate. The reading measures the costs of final-demand manufactured goods.

Investors are awaiting the release of another key inflation reading Wednesday. The closely watched October consumer price index is also expected to show a 0.6% jump compared to the prior month.

Shares of GE rallied roughly 6% after the industrial giant announced it will split into three public companies focusing on aviation, healthcare and energy. The stock led gains on the S&P 500.

NVIDIA shares rose about 3% after the company said it was joining forces with several self-driving sensor companies on safety systems that automakers will be able to deploy as soon as 2024. The semiconductor stock was among the S&P 500 and the Nasdaq Composite’s top gainers.

On the downside, PayPal shares dropped more than 10% after the digital payments company missed on quarterly revenue expectations and issued weaker-than-expected fourth-quarter and full-year guidance. The stock was the biggest laggard on the S&P 500 and the Nasdaq Composite.

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All three major averages rose to new highs in Monday’s regular trading session, which marked the S&P 500’s 64th record close of the year.

Infrastructure-related stocks were among Monday’s biggest winners after the House passed the spending package on Friday evening.

“The passing of the traditional infrastructure bill is a strong positive for the economy and for markets, as it should result in positive ROI [return on investment] for the country,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.

Strong earnings results have also supported stocks in running to new highs. Through Tuesday morning, 459 companies in the S&P 500 have reported quarterly results, with 81% beating earnings estimates.

“With Q3 earnings season winding down, economic data and the progress in economic re-openings will gain in importance in investors’ focus from here to the end of the year,” noted John Stoltzfus, chief investment strategist at Oppenheimer Asset Management.

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