Stock losses mount as investors watch for income, inflation | Business

Shares ended sharply lower on Wall Street on Thursday, and the benchmark S&P 500 closed at a three-month low as corporate earnings and inflation continued to hold investors’ attention. The S&P 500 lost 1.1% and the Dow Jones Industrial Average fell 0.9%. The Nasdaq fell 1.3% from a 2% gain earlier in the day, mainly due to a reversal in technology stocks. As investors prepare for higher interest rates, stocks in expensive technology companies and other expensive growth stocks are looking relatively less attractive. The major indices raced between gains and losses all day.

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

Stocks saw gains in afternoon trading on Wall Street Thursday as investors gauged the latest corporate earnings and the impact of inflation on the economy.

The S&P 500, which had previously risen 1.5%, fell to a gain of 0.1% at 3:11 p.m. Eastern. The benchmark index was roughly split between winners and losers.

The Dow Jones Industrial Average rose 51 points, or 0.1%, to 35,079. The tech-heavy Nasdaq was largely unchanged after a gain of 2.1%. The index’s losses in recent months put it in what Wall Street considers a market correction on Wednesday, or 10% below its peak.

Technology stocks gave up early gains. Chipmaker Nvidia fell 1.8%. The sector once again directed the broader market. As investors prepare for higher interest rates, stocks in expensive technology companies and other expensive growth stocks are looking relatively less attractive.

Banks and healthcare stocks gained, while retailers, communications and equities declined.

The 10-year Treasury yield rose to 1.84% from 1.82% at the end of Wednesday.

Stocks are heading for weekly losses in what has thus far been a losing month for every major index. The downturn follows a strong 2021, where the S&P 500 gained 26.9%. Investors may be adjusting their expectations going forward, said Mark Hackett, head of investment research at Nationwide.

“Investors are starting to get more realistic about the way the world will look in the future,” he said.

Wall Street brushed aside a Labor Department report showing that the number of Americans claiming unemployment benefits has risen to its highest level in three months as the rapidly spreading omicron variant continued to disrupt the job market.

The labor market has struggled to recover from the virus pandemic. The unemployment rate fell to a pandemic low of 3.9% last month.

Employment data was also closely watched by investors trying to gauge how it would affect the Federal Reserve’s decision to cut support for the markets and the economy. The central bank made it clear early in the pandemic that it was basing much of its support on how quickly employment is recovering.

The Fed is now expected to raise interest rates sooner and more frequently to counter rising inflation that threatens to derail further economic recovery. Supply chain problems and higher raw material costs have prompted companies to raise prices for finished products, and economists are concerned that consumers will eventually grow tired of paying higher prices and cutting back on spending.

Companies are reminding investors that supply chain issues still weigh on business. Recent inflation reports are worrying, while economic data on retail sales is also disappointing.

“These are all things that justify some of the sloppiness we’re starting the year with,” Hackett said.

The latest round of corporate earnings also gives investors a clearer picture of where Americans spend money and how inflation affects the economy.

American Airlines fell 1.1% and United Airlines fell 1% after warning investors that the latest wave of COVID-19 cases will hurt their finances in early 2022. Both airlines reported losses for the fourth quarter, although they were smaller than analysts had expected.

Aluminum products manufacturer Alcoa was up 4.3% after reporting strong fourth quarter financial results as raw material prices rose. Insurer Travelers rose 3.8% after beating analysts’ financial forecasts by far.

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