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US STOCKS-Wall Street extends slide on rising inflation fears

Stock MarketsMay 13, 2021 02:40
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© Reuters

(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window.)
* U.S. consumer prices jump most since June 2009
* Megacap growth stocks weigh heaviest
* Energy shares gain as crude climbs
* Indexes down: Dow 1.4%, S&P 1.72%, Nasdaq 2.28%

(Updates to late afternoon, changes dateline, byline)
By Stephen Culp
NEW YORK, May 12 (Reuters) - Wall Street slid on Wednesday
as inflation data blew past expectations and further stoked
jitters over the prospect of the Fed raising rates sooner than
All three major U.S. stock indexes were deep in negative
territory in the wake of the Labor Department's April consumer
prices report, which showed the biggest rise in nearly 12 years.
The report, which measures the prices U.S. consumers pay for
a basket of goods, was hotly anticipated by market participants
who have grown increasingly worried over whether current price
jumps will defy the U.S. Federal Reserve's reassurances by
morphing into long-term inflation.
But pent-up demand from consumers flush with stimulus and
savings is colliding with a supply drought, sending commodity
prices spiking, while a labor shortage drives wages higher.
"The argument is whether this bout of inflation is
transitory or here to stay," said Peter Tuz, president of Chase
Investment Counsel in Charlottesville, Virginia. "I think it's
here to stay until you see labor costs and commodity costs
mitigate some," Tuz added. (Graphic on inflation)
The Dow Jones Industrial Average .DJI fell 478.89 points,
or 1.4%, to 33,790.27, the S&P 500 .SPX lost 71.27 points, or
1.72%, to 4,080.83 and the Nasdaq Composite .IXIC dropped
305.72 points, or 2.28%, to 13,083.70.
Of the 11 major sectors in the S&P 500, 10 were in negative
territory, with tech .SPLRCT down most.
Energy .SPNY was the sole gainer, advancing 1.4%, boosted
by rising crude prices CLc1 . O/R
U.S. Treasury yields climbed following the consumer prices
report, which helped shield rate-sensitive banking stocks
.SXBK from the broader sell-off. The CBOE Volatility index .VIX , a gauge of market anxiety,
appeared set to close at its highest level since March 4.
Market-leading mega-caps, including Facebook Inc FB.O , Inc AMZN.O , Apple Inc AAPL.O , Alphabet Inc
GOOGL.O , Microsoft Corp MSFT.O and Tesla Inc TSLA.O , fell
between 1.6% and 2.9% as investors shied away from what many
feel are inflated valuations.
Bumble Inc BMBL.O slipped 7.5% ahead of the online dating
platform's first-quarter results expected after the closing
First-quarter earnings season is on the wane, with 456
constituents of the S&P 500 having reported. Of those, 86.8%
have beaten consensus estimates, according to Refinitiv IBES.
Declining issues outnumbered advancing ones on the NYSE by a
3.81-to-1 ratio; on Nasdaq, a 2.22-to-1 ratio favored decliners.
The S&P 500 posted eight new 52-week highs and no new lows;
the Nasdaq Composite recorded 30 new highs and 85 new lows.

GRAPHIC-U.S. inflation gauges

US STOCKS-Wall Street extends slide on rising inflation fears

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