Wall Street Opens Mostly Lower as Rally Runs Out of Steam; Dow Down 250 Pts

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By Geoffrey Smith 

Investing.com — U.S. stock markets opened mostly lower again on Tuesday, amid fresh concerns that stocks may have advanced too far, too fast.

By 10 AM ET (1400 GMT), the Dow Jones Industrial Average was down 250 points, or 0.7%, while the Nasdaq Composite was down 1.9%. The S&P 500 was outperforming with a gain of 0.3%.

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The market was unsettled by comments from JPMorgan (NYSE:JPM) Chief Executive Jamie Dimon at a Wall Street Journal event saying that a return of is likely, given that pent-up demand will be released into the economy just as the government is ramping up spending to force the pace of recovery.

Fears about inflation have been largely quiescent for the last couple of weeks, after an effective barrage of communications from the Federal Reserve promising not to reduce monetary stimulus for some time yet. However, surging prices and input prices for manufacturers are starting to force another rethink.

Michael Antonelli, a market strategist at RW Baird, said via Twitter that the market is likely “as good as it gets” right now, given fresh memories of a strong earnings season and data that are flattered by extraordinarily weak year-ago numbers.

“I’m not a “sell in May” guy but summer can be a choppy period for markets especially when we’re all outdoors living a Roaring 20s,” Antonelli said.  

Pfizer (NYSE:PFE) stock bucked the , rising over 3% as it revised its guidance for the year substantially higher due to the expected performance of its Covid-19 vaccine, developed jointly with BioNTech. CVS Health (NYSE:CVS) also gained, as the pharmacy chain reported a strong first quarter in which demand for Covid-19 testing more than offset the effects of a ‘weak’ season for cold and flu medicines due to social distancing.

However, tech stocks sold off broadly, as doubts about their ability to continue growing earnings bubbled to the surface. Old-economy stocks too came under pressure – handy earnings beats weren’t enough to stop  ConocoPhillips (NYSE:COP) and Dupont (NYSE:DD) stock both falling over 1.2%.

“Longer-term expectations appear overly optimistic,” at Oxford said in a note to clients. “The bottom-up consensus points to an ongoing profit margin expansion over the next few years and we think this is unlikely against a backdrop of rising cost pressures and proposals for higher corporate tax rates.”

Source: Investing.com

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