Dow hit with 682 point loss, Nasdaq off 2.7% on inflation beating
10-year yield rose 7 basis points to 1.69%
Stock market could be undervalued going into 2022: Investment strategist
The Leuthold Group chief investment strategist Jim Paulsen reacts to the CPI report on inflation and discusses his outlook for the market.
U.S. equity markets were pummeled Wednesday as traders digested a hotter-than-expected read on consumer prices and a spike in bond yields.
The Dow Jones Industrial Average fell 682 points, or 1.99%, while the S&P 500 and the Nasdaq Composite were lower by 2.15% and 2.67%, respectively. The selling came as the 10-year yield spiked 7 basis points to a five-week high of 1.69% as data showed a big jump in inflation.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 44296.51 | +426.16 | +0.97% |
| SP500 | S&P 500 | 5969.34 | +20.63 | +0.35% |
| I:COMP | NASDAQ COMPOSITE INDEX | 19003.651134 | +31.23 | +0.16% |
Consumer prices in April rose 0.8% for the month and 4.2% year over year, making for the biggest annual increase since September 2008. Both exceeded economists' expectations. The report caused investors to assess the possibility that the Federal Reserve may have to alter its asset purchase plan and course for interest rates.
In stocks, Tesla Inc. exported 55% of the 25,845 vehicles made at its Shanghai plant in April, according to figures released Wednesday by the China Passenger Car Association.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 352.56 | +12.92 | +3.80% |
| AAPL | APPLE INC. | 229.87 | +1.35 | +0.59% |
| MSFT | MICROSOFT CORP. | 417.00 | +4.13 | +1.00% |
Meanwhile, mega-cap tech stocks including Apple Inc. and Microsoft Corp. remained in focus as investors continued to rotate out of growth stocks and into value plays.
A Centers for Disease Control and Prevention panel on Wednesday will consider Pfizer Inc. and BioNTech SE’s COVID-19 vaccine for use in adolescents.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| PFE | PFIZER INC. | 25.63 | +0.49 | +1.95% |
| BNTX | BIONTECH SE | 113.13 | +4.90 | +4.53% |
In earnings, Wendy’s Co. reported strong same-store sales and hiked its full-year earnings forecast due to increased optimism its breakfast menu, announced just before lockdowns went into effect last year, will bring customers into restaurants.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| WEN | THE WENDY'S CO. | 17.98 | -0.13 | -0.72% |
In other food news, Dominos Pizza bucked the selling posting marginal gains after hedge fund investor Bill Ackman disclosed he took a 6% stake in the chain.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DPZ | DOMINO'S PIZZA INC. | 452.65 | +6.79 | +1.52% |
In commodities, West Texas Intermediate crude oil jumped 80 cents to $66.08 per barrel and gold slid $13.30 to $1,822.60 an ounce.
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Overseas markets were mostly higher.
Britain’s FTSE 100 was out in front in Europe, advancing 0.82%, while Germany’s DAX 30 and France’s CAC 40 ticked up 0.2% and 0.19%, respectively.
In Asia, Japan’s Nikkei 225 lost 1.61%, China’s Shanghai Composite rose 0.61% and Hong Kong’s Hang Seng index gained 0.78%.