Shares flat while investors struggle with rising inflation, Disney failed

Wall Street was mixed Thursday as investors struggled with the implications of inflation rising to its highest level in decades and third-quarter earnings starting to show signs of slowing growth.

The S&P 500 rose after losing back-to-back sessions. Nasdaq fared better, with some of Wednesday’s biggest technology laggards posting a recovery – led by Netflix (NFLX), which overtook Disney in market value.

With no notable economic data released on Thursday due to the Veterans Day holiday, investors have been left to continue to react to the latest batch of mixed economic data. And meanwhile, a few closely monitored firms missed quarterly earnings estimates, although most S&P 500 firms have exceeded expectations during the third-quarter earnings season to date.

After the market closed on Wednesday, the Dow component Disney (DIS) reported disappointing sales and profits as Disney + subscriber growth slowed more than expected. Beyond Meat (BYND) also offered a weak revenue forecast for the current quarter, indicating continued sluggishness in the plant-based meat alternative producer’s sales trends. However, Affirm (AFRM) saw shares soar in the pre-market session, with the buy-now-pay-later financial technology platform topping quarterly sales expectations and revealing an expanded payment partnership with Amazon.

Elsewhere, increased demand for shares in electric vehicles and for shares in recently public companies showed signs of slowing down following the public debut of Rivian Automotive (RIVN). The Amazon-backed EV maker’s stock closed higher at 29% from its $ 78-per-share listing on its first trading day on the Nasdaq.

A larger-than-expected jump in the Bureau of Labor Statistics’ consumer price index was a particular source of concern for traders on Wednesday, suggesting that increased price pressure was still present across many categories. The print also overshadowed some other optimistic economic data on the labor market recovery as the first unemployment figures fell to reach a new low in the pandemic last week.

The broadest target for consumer price changes increased by a staggering 6.2% in October compared to the previous year, representing the largest annual increase in 31 years.

“This certainly tells us, I think, that price pressure is more persistent. It’s broader. They’re not just narrowly focused on these categories, whether it’s cars and goods with limited supply. And it’s going to last longer than expected. Matthew Luzzetti, chief economist at Deutsche Bank in the US, told Yahoo Finance Live.

It is important that inflation also suggests that the Federal Reserve will have to step in faster than previously expected to raise interest rates to help bring rising prices into check. Markets are pricing an initial rise to bring interest rates up from their current near-zero levels by mid-2022 – but more prints showing higher inflation could pull those expectations forward, Luzzetti added. And already now, consumers ‘prospects for inflation have risen significantly, and the New York Federal Reserve reported this week that consumers’ short-term inflation expectations jumped to a record high of 5.7%.

“We think the Fed will have to raise interest rates next year. They have signaled that they will step down through the middle of the year and that is our baseline at this point,” Luzzetti said. “But if you continue to see price pressures like this over the next few months and more persistently, it may cause them to have to act earlier than expected.”

16:05 ET: Stocks end mixed: Tech stocks lead Nasdaq comeback as Disney earnings pull down Dow

Here were the main movements in the markets from kl. 16:05 ET:

  • S&P 500 (^ GSPC): +2.56 (+ 0.06%) to 4,649.27

  • Dow (^ DJI): -158.71 (-0.44%) to 35,921.23

  • Nasdaq (^ IXIC): + 81.58 (+ 0.52%) to 15,704.28

  • raw (CL = F): -0.17 $ (-0.21%) to $ 81.17 per. barrel

  • gold (GC = F): + $ 17.00 (+ 0.92%) to $ 1,865.30 pr. ounce

  • 10-year Treasury (^ TNX): 0 bps to give 1,5600%

9:30 ET: Stocks embrace the flat line

Here were the main movements in markets from kl. 9:30 ET:

  • S&P 500 (^ GSPC): 4,655.17, +8.46 (+ 0.18%)

  • Dow (^ DJI): 36,000.82, -79.12 (-0.22%)

  • Nasdaq (^ IXIC): 15,728.25, +105.55 (+ 0.68%)

  • raw (CL = F): $ 81.61 pr. barrel, + $ 0.27 (+ 0.33%)

  • gold (GC = F): $1,863.40 pr. ounce, +15.10 USD (+0.82%)

  • 10-year Treasury (^ TNX): flat to give 1.5600%

7:47 ET Thursday: Stock futures recover some losses

Here is where the markets traded prior to the opening bell:

  • S&P 500 futures (ES = F): + 16.25 points (+ 0.35%) to 4,658.25

  • Dow futures (ÅM = F): +44 points (+ 0.12%) to 35,036.00

  • Nasdaq futures (NQ = F): +98.25 points (+ 0.61%) to 16,078.75

  • raw (CL = F): – $ 0.59 (-0.73%) to $ 80.75 pr. barrel

  • gold (GC = F): + $ 12.30 (+ 0.67%) to $ 1,860.60 pr. ounce

  • 10-year Treasury (^ TNX): +12.1 bps to give 1.5700%

18:11 ET Wednesday: Equity futures slide lower ahead of inflation data

Here’s where the markets traded on Wednesday night:

  • S&P 500 futures (ES = F): +3 points (+ 0.06%), to 4,645.00

  • Dow futures (ÅM = F): -8 points (-0.02%), to 35,984.00

  • Nasdaq futures (NQ = F): +12.5 points (+ 0.08%) to 15,993.00

A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, USA, November 8, 2021. REUTERS / Brendan McDermid

A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, USA, November 8, 2021. REUTERS / Brendan McDermid

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter

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