Stock market news live updates: Stocks end mixed as earnings roll in, Powell reaffirms stance on transitory inflation – Yahoo Finance

Stocks ended mixed on Wednesday as investors digested a batch of second-quarter corporate earnings results and another set of inflation data.

The S&P 500 gained and touched an intraday record, shaking off losses from Tuesday’s session. The Dow also rose, while the Nasdaq erased earlier gains to end lower. Bank of America (BAC) shares dipped after the company became the latest major bank to post mixed second-quarter earnings results, with revenue net of interest expenses dipping 4% over last year and missing estimates amid a decline in interest rates. 

Stocks appeared to shrug off some of the concerns over inflation that had weighed on stocks earlier this week, especially after prepared remarks ahead of Federal Reserve Chair Jerome Powell’s appearance before Congress on Wednesday showed he believed inflation “will likely remain elevated in coming months before moderating.” The central bank leader also said the U.S. economy was “still a ways off” from reaching the Fed’s threshold of “substantial further progress” toward recovering, which would trigger a roll-back of crisis-era asset purchases. 

Still, some of the latest data has pointed to a marked increase in prices, albeit off last year’s pandemic-depressed lows. A hotter-than-expected print on consumer price inflation registered the fastest annual increase since 2008 on Tuesday. And on Wednesday, the Bureau of Labor Statistics’ June producer price index registered a 7.3% year-over-year increase, marking the fastest rise on record in data spanning back to 2010.

Analysts have been split over just how transitory inflationary pressures in the market will ultimately end up being, and for how long the Federal Reserve will be able to shrug off rising prices before making a monetary policy move. Bank of America’s Alexander Lin wrote in note to clients that the firm doesn’t believe the consumer price index (CPI) “report changes much for the Fed,” while ING economist James Knightley said the blowout inflation reading “makes it increasingly difficult for the Fed to stick to its position that elevated inflation readings are merely ‘transitory.'”

Others are still firmly in the mindset that price pressures will subside later this year. And to be sure, much of the rise in the June CPI report comprised an increase in used car and truck prices and other categories consistent with an only momentary reopening-fueled surge.

“This inflation is transitory, and it will begin to pull back as we move towards the end of the year,” Brent Schutte, Northwestern Mutual Wealth Management chief investment strategist, told Yahoo Finance. “There are parts of the economy that were impacted by COVID; those supply chains are still impacted. And that’s what driving up the prices of certain aspects of the inflation equation.” 

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4:03 p.m. ET: Stocks end mixed as earnings roll in, Powell reaffirms stance on transitory inflation

Here were the main moves in markets as of 4:03 p.m. ET:

• S&P 500 (^GSPC): +5.17 (+0.12%) to 4,374.38

• Dow (^DJI): +44.64 (+0.13%) to 34,933.43

• Nasdaq (^IXIC): -32.70 (-0.22%) to 14,644.95

• Crude (CL=F): -$2.56 (-3.40%) to $72.69 a barrel

• Gold (GC=F): +$17.40 (+0.96%) to $1,827.30 per ounce

• 10-year Treasury (^TNX): -5.9 bps to yield 1.3560%

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12:25 p.m. ET: International air travel is starting to reopen, but demand is still centered on local travel: Cowen. 

Both American Airlines and Delta Air Lines offered upbeat outlooks on travel in the back half of 2021, with increasing consumer demand to get out after over a year of social distancing helping boost airlines. However, without a full return of business travel and long-haul international air travel, getting these carriers’ results back to 2019 levels will be difficult, one Cowen analyst noted. 

“We’re starting to see international [travel] come back … as markets reopen, there’s a jailbreak and people go to those markets, especially as restaurants and tourist attractions and other things reopen,” Helane Becker, analyst at Cowen Research, told Yahoo Finance Live. “There’s a shift of demand that’s occurred from Europe to Asia into the United States. Instead of going to Europe this summer, you’re probably going somewhere more local … any place that’s open where you don’t have to quarantine.” 

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12:17 p.m. ET: Stocks erase most earlier gains, ticking up just slightly

The three major indexes were only slightly above the flat line heading into the afternoon session on Wednesday, erasing most earlier gains.

The Dow erased earlier gains of as many as 180 points, or 0.5%, to trade just 13 points higher Wednesday afternoon. Nearly 2% gains in shares of Apple and Honeywell were mostly outweighed by drops in shares of Walgreens Boots Alliance, Caterpillar, and Salesforce, which were the biggest laggards in the index.

In the S&P 500, cyclical sectors including energy, financials and materials lagged, while consumer staples, real estate and utilities outperformed and kept the blue-chip index narrowly in the green. 

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9:31 a.m. ET: Stocks open higher 

Here’s where markets were trading after the opening bell on Wednesday: 

• S&P 500 (^GSPC): +19.19 (+0.44%) to 4,388.40

• Dow (^DJI): +155.41 (+0.45%) to 35,044.20

• Nasdaq (^IXIC): +99.95 (+0.7%) to 14,779.61

• Crude (CL=F): +$75.05 (-0.27%) to $75.05 a barrel

• Gold (GC=F): +$17.90 (+0.99%) to $1,827.80 per ounce

• 10-year Treasury (^TNX): -3.9 bps to yield 1.376%

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8:43 a.m. ET: Citi, Wells Fargo beat on quarterly profits as more bank earnings roll in

A slew of big bank earnings continued into Wednesday morning, with both Citi (C) and Wells Fargo (WFC) posting reports.

Citi shares gained after the company posted earnings that topped estimates, with earnings per share of $2.85 growing handily over the 50 cents per share in the comparable quarter last year and topping estimates for $1.94. The profit boost came alongside a reserve release as the company took down $2.4 billion in credit reserves amid the improving economy, versus last year’s build of $5.9 billion. Beneath the headline results, however, Citi did show some weakness in fixed income trading, with revenue in the business unit down 43% over last year to $3.21 billion. The light quarterly bond-trading revenue matched trends seen at other big banks including JPMorgan Chase earlier this week. 

Meanwhile, Wells Fargo also beat earnings estimates, with earnings per share on $1.38 coming in well above the 98 cents anticipated. Revenue also beat, rising to $20.27 billion versus the $17.77 billion, led by consumer banking and lending. 

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8:32 a.m. ET: Producer prices surged by the most on record in June over last year

Producer prices rose far more than expected in June as supply chain constraints and shortages pushed up input prices for a range of goods.

The producer price index increased 1.0% in June over May, accelerating from May’s 0.8% monthly rise, according to the Bureau of Labor Statistics. This outpaced estimates for a 0.6% monthly rise, according to Bloomberg data. About 60% of the increase in the overall index came amid a jump in prices in the services sector, with heightened demand in the service economy during the reopening pushing prices up.

Over last year, the producer price index rocketed higher by 7.3%, coming in well above May’s 6.6% rise. This marked the fastest rise on record, based on BLS data going back to 2010.

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7:38 a.m. ET: Delta Air Lines narrows losses in second quarter, sees return to profitability 

Delta Air Lines (DAL) posted a smaller-than-anticipated second-quarter loss, with the marked return of leisure travel helping boost the company’s results.

Adjusted losses were $1.07 per share, coming in narrower than the $1.42 expected, according to Bloomberg consensus data. Revenue of $6.3 billion matched expectations. 

Pre-tax losses of $881 million came down by about $2 billion compared to the first quarter of 2021. Delta Air Lines CEO Ed Bastian told Yahoo Finance’s Adam Shapiro in an interview that he expected the airline would return to profitability in the current third quarter.

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7:13 a.m. ET: Mortgage applications jumped by the most since January last week as rates fell 

Mortgage application volume increased by the most since January last week as an at least momentary dip in interest rates attracted buying and refinancing activity in the housing market.

The Mortgage Bankers Association’s weekly mortgage index rose 16% week-on-week during the period ended July 9. Refinances rose by 20% over last week, but were still 29% lower compared to the comparable week in 2020. Purchases were up 8% on the week, including a seasonal adjustment for the Fourth of July holiday. On an unadjusted basis, purchases were down 13% week-on-week and were down 29% over last year. 

“Overall applications climbed last week, driven heavily by increased refinancing as rates dipped again. Treasury yields have trended lower over the past month as investors remained concerned about the COVID-19 variant and slowing economic growth,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a press statement. “Mortgage rates fell for the second consecutive week as a result, with the 30-year fixed rate hitting 3.09%, its lowest level since February 2021.

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7:07 a.m. ET Wednesday: Stocks trade mixed ahead of more earnings, inflation data 

Here’s where markets were trading Wednesday morning: 

• S&P 500 futures (ES=F): 4,364.00, +2.75 points (+0.06%)

• Dow futures (YM=F): 34,770.00, -6 points (-0.02%)

• Nasdaq futures (NQ=F): 14,913.75, +0.33 points (+0.33%)

• Crude (CL=F): -$0.65 (-0.65%) to $74.76 a barrel

• Gold (GC=F): +$6.40 (+0.35%) to $1,816.30 per ounce

• 10-year Treasury (^TNX): -1.7 bps to yield 1.398%

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6:05 p.m. ET Tuesday: Stock futures hug the flat line 

Here’s where markets were trading Tuesday evening

• S&P 500 futures (ES=F): 4,359.75, -1.5 points (-0.03%)

• Dow futures (YM=F): 34,778.00, +2 points (+0.01%)

• Nasdaq futures (NQ=F): 14,864.75, -0.25 points (roughly unchanged)

NEW YORK, NEW YORK – MAY 11: The New York Stock Exchange stands in lower Manhattan after global stocks fell as concerns mount that rising inflation will prompt central banks to tighten monetary policy on May 11, 2021 in New York City. By mid afternoon the tech-heavy Nasdaq Composite had lost 0.6% after falling 2.2% at its session low. (Photo by Spencer Platt/Getty Images)

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

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