US stocks end mixed after another day of erratic trading

NEW YORK – The stock market ended another erratic trading day with mixed results as investors struggle to figure out what’s next with inflation and the US central bank’s response to it . The S&P 500 erased most of an early slump to fall just 0.1%, largely due to declines in a few tech giants like Apple and Microsoft. The Dow Jones Industrial Average lost 0.3% and the Nasdaq gained 0.1%. The Labor Department reported Thursday that wholesale prices rose 11% in April from a year earlier. This follows a hot report on inflation at the consumer level on Wednesday.

THIS IS A BREAKING NEWS UPDATE. AP’s previous story follows below.

NEW YORK (AP) — Tech companies topped shares well below Wall Street in afternoon trade Thursday after investors received another dire inflation reading.

The S&P 500 was down 1.1% as of 3:30 p.m. EST. The Dow Jones Industrial Average fell 417 points, or 1.3%, to 31,423 and the Nasdaq fell 0.9%.

Most of the 11 sectors of the S&P 500 were in the red. Tech stocks were once again among the largest weightings in the broader market. Apple fell 3.8% and chipmaker Nvidia fell 4.6%. The tech sector has made solid gains during the pandemic amid a broad shift to work and home shopping, but has seen sharp declines as inflation worsens and rates interest increases.

“The pullback in growth stocks, especially technology, has been dramatic,” said Brian Price, head of investment management at Commonwealth Financial Network. “We have a calculation, if you will, that we may have gone too far too fast” with many of these actions.

The 10-year Treasury yield fell to 2.84% from 2.92%.

Major indexes are all in the red for the week as investors worry about rising inflation, rising interest rates and their impact on the economy.

The Labor Department reported Thursday that wholesale prices rose 11% in April from a year earlier. Many of the costs at the wholesale level are passed on to consumers as businesses attempt to cover higher expenses. This raised further concerns about a potential pullback in spending that could dampen economic growth.

Inflationary pressure has increased for consumers. On Wednesday, the Labor Department’s report on consumer prices came in hotter than expected by Wall Street. It also showed a bigger-than-expected rise in prices outside of food and gasoline, what economists call “underlying inflation” and which may be more predictive of future trends.

Rising inflation prompted the Federal Reserve to pull its benchmark short-term interest rate from its all-time high near zero, where it has spent most of the pandemic. He also said he may continue to raise rates to double the usual amount at future meetings. Investors fear that the central bank could cause a recession if it raises rates too high or too quickly.

Inflation was aggravated by Russia’s invasion of Ukraine and the impact of the conflicts on rising energy prices. China’s recent lockdowns amid concerns over a resurgence of COVID-19 have also deepened supply chain and production issues at the center of rising inflation.

The impact of rising prices for consumers has been global. On Thursday, Britain said its economy grew at the slowest pace in a year during the first quarter. This raises fears that the country is heading into a recession.

The latest round of corporate earnings is also being closely watched by investors gauging how companies and industries are handling inflationary pressure. Entertainment giant Disney fell 2.2% after missing analysts’ forecasts in its latest earnings report. Kate Spade coach and owner Tapestry jumped 15.4% to the S&P 500’s biggest gainer after posting strong financial results.

“We will continue to pay attention to what the Fed has to say, but it’s worth paying attention to the outlook for companies on earnings calls,” Price said. “That’s something that investors will increasingly focus on as we enter the second half of the year, the sustainability of corporate earnings.”

Bitcoin was also caught in the selloff on Thursday. The digital currency fell 5.3% to $28,254, according to CoinDesk. Just six months ago it was over $66,000.

“Bitcoin is still vulnerable to a final dip that could coincide with a stock market sell-off, before many crypto investors feel bottom is in,” wrote Edward Moya, senior market analyst at OANDA, in a note. search Thursday.

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Veiga reported from Los Angeles.

Garland K. Long