US stocks mostly fell in afternoon trading Wednesday after economic reports pointed to a sharp rise in retail sales and healthy industrial production, but also signs of rising inflation. The Dow Jones Industrial Average DJIA, + 0.04% was 6 points higher, close to 31,529. The S&P 500 SPX index, -0.31% fell 14 points to reach 3,919, 0.4% less. The Nasdaq Composite COMP, -0.91%, fell 143 points, or 1%, to trade near 13,904. On Tuesday, the Dow finished at a record high, but the S&P 500 and Nasdaq Composite indices broke through a two-day series of gains to finish lower. What drives the market? US retail sales figures for January offered the latest reading on consumer health amid the coronavirus pandemic, with crushing sales estimates and a 5.3% increase for the month, after a decline from 1% in December as COVID cases rose.
A separate report on industrial production from the Federal Reserve showed a 0.9% rise in January, also defeating economists’ forecasts for a 0.5% rise. Businesses restocked their inventories more than expected in December, but a reading on homebuilder sentiment was stronger than expected. However, the producer price index rose 1.3% in January, the biggest increase since the index underwent a major revision in 2009 and prices for services were included in the report. The wholesale inflation rate in the past 12 months rose to 1.7% from 0.8% in late 2020, not far from the pre-pandemic level of 2%. The data is helping boost US bond yields as investors also look to the prospect of increased fiscal stimulus from Congress and a decline in coronavirus cases. On Tuesday, the 10-dollar TMUBMUSD10Y 1.292% note yielded close to 1.30%, its highest level since February 26, according to Dow Jones Market Data. Yields, which are moving in the opposite direction to bond prices, rose further in early trading on Wednesday, but then fell back. Read: This is when rising bond yields will become a problem for the stock market “The retail sales figures were staggering and the PPI was very strong too, but we’ve had a string of lows months before that “said Peter Andersen, founder of Boston-based Andersen Capital Management. “It is too difficult to extrapolate based on a month. It could show pent-up demand, but the supply demand dynamics right now is still too difficult to filter out. I think it could show what the pent-up demand is once we’re done with the launch of the vaccine. We’re off to the races. “See: Why the stock market ‘worst case scenario’ hinges on these 3 ingredients In an interview with MarketWatch, Andersen said he was” really surprised by the attention investors are paying to bright items like bitcoin, space exploration, SPAC. “The market could use a little direction for more news on the progress of the vaccine, he said, but overall, aside from a few foamy areas, it’s not worrisome. Greg Marcus, managing director of UBS Private Wealth Management said the explanation for this week’s turmoil is a bit simpler: “Although rates are rising, they are still low,” he said. “Markets went too far, too fast.” Once the process of the vaccine comes at its own pace, Marcus told MarketWatch, the rest of the year “could feel like New Years Eve every day. I still believe that there is so much money on the sidelines and that consumers have saved or so much money and they are hoping to spend money again. ” He’s bullish on small and mid-cap stocks, as well as emerging market names. Meanwhile, freezing weather is posing trouble across much of the US, including Texas, leaving millions without power and nearly 75% of the lower 48 states under a layer of snow, The Wall Street Journal reported, citing the National Snow Analysis of the National Oceanic and Atmospheric Administration. report. The icy weather reduced US oil production and helped boost prices. In other economic reports, investors will be on the lookout for minutes from the January Federal Reserve policy meeting to be released at 2 p.m. ET and more clues on how the central bank will react to the economic improvement thanks to increased fiscal spending and effective vaccine launches. See: Fleeing from Big Cities Caused Suburban Home Prices to Spike: Will You Survive the Pandemic? Shares of Verizon Communications Inc. VZ rose 4.5% and Chevron Corp. CVX rallied 2.2% to set the pace for the Dow after Warren Buffett’s Berkshire Hathaway Inc. BRK.B revealed that it acquired large stakes in companies during the fourth quarter. Canadian cannabis company Sundial Growers Inc. SNDL filed a shelf registration with the Securities and Exchange Commission to issue up to $ 1 billion in securities over time. The shares fell more than 16% in midday trading. Medical device maker Medtronic PLC MDT, -1.52% said Wednesday that it is voluntarily recalling the unused Valiant Navion thoracic stent graft system and informing physicians to stop using the device immediately until further notice. The shares fell 1.2%. Energy Transfer LP ET announced on Wednesday an agreement to buy Enable Midstream Partners LP ENBL, -7.84% in a stock transaction valued at $ 7.2 billion. Shares of Analog Devices Inc. ADI, -0.32%, fell after the chipmaker beat earnings expectations and raised its dividends. Shares of Hilton Worldwide Holdings Inc. HLT, -0.25% changed little on Wednesday, after the hotel operator reported a surprise loss in the fourth quarter and revenues that fell more than expected, as the increase in cases COVID-19 and tightening travel restrictions interrupted the positive momentum seen in the summer and fall. Shopify Inc. SHOP, -1.40% of shares fell 7.1% despite better-than-expected quarterly results. What are other assets doing? The yield on the 10-year Treasury note TMUBMUSD10Y, 1,292% fell almost 4 basis points to 1,281% after a previous rise. The ICE US Dollar Index DXY, + 0.49%, a measure of the currency against a basket of six major rivals, was up 0.4%. Oil futures rose slightly as power disruptions continued across the country, with the US benchmark CL.1 index up 1.50%, up 0.6% to $ 60.42 barrel, staying above the key level of $ 60. GC00 Gold Futures, -1.53% plunged 1.1% to approximately $ 1,778.30 as bond yields rose. The pan-European Stoxx 600 SXXP index, -0.74%, closed 0.7% lower and the London UKX FTSE 100 stock index lost 0.6%. Markets in Hong Kong HSI, + 1.10% closed 1.1% higher, while Japan’s Nikkei 225 NIK index lost 0.6%. Read Next: Why the Stock Market ‘Worst Case’ Scenario Depends on These 3 Ingredients