Los Angeles Times

Banks, industrial­s push stocks lower

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A slide in banks and industrial companies nudged stocks on Wall Street to modest losses Wednesday after an early gain faded in the last half an hour of trading.

Stocks championed by hordes of online retail investors, the “meme” stocks, as they have become known, were volatile once again.

The Standard & Poor’s 500 slipped 0.2%, erasing its meager gain from a day earlier. The benchmark index’s modest moves this week have it on track for its first weekly loss in three weeks. The Dow Jones industrial average gave up 0.4%, while the Nasdaq composite held up somewhat better, ending down just 0.1%.

Treasury yields slipped. The yield on the 10-year Treasury fell to 1.49% from 1.52% late Tuesday. The falling yields broadly weighed down banks, which rely on higher yields to charge more lucrative interest on loans. JPMorgan Chase and Citigroup fell 1.2%.

Several healthcare companies made solid gains. Merck rose 2.3% after announcing a supply agreement with the U.S. and Canada for a potential COVID-19 treatment. AbbVie gained 1.5% after announcing a collaborat­ion with Caraway Therapeuti­cs to make treatments for Parkinson’s disease and other neurodegen­erative disorders.

All told, the S&P 500 fell 7.71 points to 4,219.55. The Dow lost 152.68 points and closed at 34,447.14, while the Nasdaq gave up an early gain, shedding 13.16 points to end at 13,911.75. The techheavy index was lifted by the same Big Tech companies that have pushed it generally higher for the last 18 months. Microsoft rose 0.4% and Amazon added 0.5%.

Small-company stocks, which have outgained the broader market this year, also fell. The Russell 2000 index gave up 16.63 points, or 0.7%, and closed at 2,327.13.

Investors continue to focus a significan­t amount of attention on inflation. China’s producer price index, which measures prices of raw goods and services, jumped 9% in May from a year earlier, the fastest increase since 2008 and above analysts’ forecasts. Surging prices for oil and other commoditie­s and manufactur­ing components such as semiconduc­tors were the main factor behind the jump in producer prices there.

Aside from rising prices of raw materials, fuel and other items needed for manufactur­ing, factories are struggling to keep up with demand as the pandemic recedes in many places. That has pushed up prices of a range of goods, including food and household staples.

Investors will get closely watched U.S. inflation data Thursday and how it might affect ultra-low interest rates and other market-supporting policies.

The market has been relatively constraine­d over the last several days, and investors have parsed any data to judge whether rising inflation will be temporary, as the Federal Reserve thinks, or more permanent.

The Labor Department’s release of the consumer price index Thursday will add to that discussion, particular­ly because it comes shortly before the Federal Reserve’s next meeting on interest rate policy next week.

Volatility in stocks embraced by investors using online forums such as Reddit continued for another day Wednesday. Clover Health fell 23.6%, while AMC Entertainm­ent sank 10.4%. Wendy’s plunged 12.7% after soaring 25.9% a day earlier.

The original “meme” stock, GameStop, said after the closing bell Wednesday that it has brought on a pair of Amazon veterans as its new chief executive and chief financial officer to aid in its digital turnaround. The company also reported a smaller quarterly loss than a year earlier as revenue increased. Its shares fell 5% in after-hours trading.

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