US stocks end lower ahead of inflation report

All three major US stock indexes reversed earlier gains, but remained range-bound in the absence of any clear market catalysts. — Reuters pic
All three major US stock indexes reversed earlier gains, but remained range-bound in the absence of any clear market catalysts. — Reuters pic

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NEW YORK, June 10 ― Wall Street ended a see-saw session lower yesterday as market participants awaited inflation data for clues as to when the US Federal Reserve might tighten its dovish monetary policy.

The retail “meme stock” craze continued unabated.

All three major US stock indexes reversed earlier gains, but remained range-bound in the absence of any clear market catalysts.

“There's a lull period in terms of news,” said Chuck Carlson, chief executive at Horizon Investment Services in Hammond, Indiana. “We're through earnings period and people are waiting for inflation numbers tomorrow, so you have a mixed market where the major averages aren't doing much of anything.”

Heavily shorted meme stocks extended their social media-driven rally, with Aethlon Medical soaring 388.2 per cent.

Reddit chatter also helped to lift shares of prison operator GEO Group and World Wrestling Entertainment 38.4 per cent and 10.9 per cent, respectively.

However, other meme stocks such as Clover Health, AMC Entertainment and Bed Bath & Beyond closed lower.

Retail volume has returned to its January peak, according to Vanda Research, as social media forums scramble to identify the next GameStop Corp, the stock that kicked off the phenomenon.

“It feels like alternative stock market,” Carlson added. It's an indication of speculation. You can be successful if you get in at the right moment but it's very difficult to play successfully over time.”

“I don't think you should read too much regarding the broader market.”

GameStop named Matt Furlong as its new CEO ahead of its earnings report, which showed a quarterly loss of US$1.01 (RM4.11) per share. Its shares fell over 4 per cent in after-hours trading.

US President Joe Biden changed course in ongoing negotiations to reach a bipartisan agreement on infrastructure spending after one-on-one talks with Senator Shelley Capito broke down.

Industrial stocks, which stand to benefit from an infrastructure deal, slid by 1 per cent.

Washington lawmakers passed a sweeping bill designed to boost the United States' ability to compete against Chinese technology, providing funds for research and semiconductor production amid an ongoing chip supply drought. The bill now heads to the House of Representatives.

Even so, the Philadelphia SE Semiconductor index slipped 0.4 per cent.

The Labour Department's consumer price index report due out today will provide another take on inflation amid the recovery's demand/supply imbalance as investors determine whether inflationary pressures, as the Fed asserts, will be transitory.

The Dow Jones Industrial Average fell 152.68 points, or 0.44 per cent, to 34,447.14; the S&P 500 lost 7.71 points, or 0.18 per cent, at 4,219.55; and the Nasdaq Composite dropped 13.16 points, or 0.09 per cent, to 13,911.75.

Among the 11 major sectors in the S&P 500, healthcare gained the most.

Benchmark Treasury yields dropped below 1.5 per cent for the first time since May, weighing on interest-sensitive financials.

Campbell Soup Co missed quarterly profit expectations and slashed its full-year earnings forecast, sending its shares down 6.5 per cent.

Pfizer Inc gained 2.5 per cent after the Biden administration unveiled plans to donate 500 Covid-19 doses to about 100 countries over the next two years, according to a Washington Post report.

Drugmaker Merck & Co rose 2.3 per cent on the heels of its announcement the US government had agreed to buy about 1.7 million courses of the company's experimental Covid-19 treatment, molnupiravir, for about US$1.2 billion, if the drug meets regulatory approval.

Declining issues outnumbered advancers on the NYSE by a 1.12-to-1 ratio; on Nasdaq, a 1.13-to-1 ratio favoured decliners.

The S&P 500 posted 38 new 52-week highs and two new lows; the Nasdaq Composite recorded 126 new highs and 14 new lows.

Volume on US exchanges was 11.53 billion shares, compared with the 10.74 billion average over the last 20 trading days. ― Reuters

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