Another worrisome inflation report helped rattle stocks Thursday morning. The Nasdaq composite was on track to exceed the losses from the Covid-19 bear market, and normally steady AmerisourceBergen sold off sharply.
The S&P 500 was down 0.5% while the Nasdaq composite fell 0.4% after both bounced off opening lows. The small-cap Russell 2000 index was nearly unchanged after erasing early losses.
With a decline of more than 30% from its prior high, the Nasdaq is on pace to pass the loss during the pandemic sell-off of March 2020. According to Dow Jones Market Data, the composite plummeted 30.1% in the Covid crash.
The Dow Jones Industrial Average was down 0.4%. Walt Disney gapped down to a two-year low after the company missed earnings and sales estimates for its March quarter. But Disney+ subscriber growth blew past estimates.
U.S. Stock Market Today Overview |
||||
|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 31569.81 | -264.30 | -0.83 |
| S&P 500 | (0S&P5) | 3890.79 | -44.39 | -1.13 |
| Nasdaq | (0NDQC ) | 11222.46 | -141.78 | -1.25 |
| Russell 2000 | 170.22 | -0.38 | -0.22 | |
| IBD 50 | 28.76 | -0.53 | -1.81 | |
Last Update: 10:08 AM ET 5/12/2022 |
||||
Volume rose on the NYSE and Nasdaq compared with the same time on Wednesday.
Wholesale Inflation Remains High
The producer price index rose 0.5% in April from March and 11% from the year-ago figure. The inflation rate slowed from 1.6% and 11.5%, respectively, in the previous month. While the monthly increase met the Econoday consensus estimate, the annual increase was above estimates of 10.7%.
Core prices, which exclude food and energy costs, rose 0.4% month to month and 8.8% on an annual basis. Both were slightly below forecasts.
On Wednesday, the consumer price index showed an 8.3% increase in April, slowing from the previous month but still higher than expected. Prices rose 0.3% from the prior month, while annual core prices climbed 6.2%.
Bill Adams, chief economist for Comerica Bank, said the PPI — like Wednesday's CPI release, shows overall inflation is starting to slow despite still-rising food and energy prices.
"The April PPI and CPI reports will not dissuade the Fed from making another half percentage point rate hike when they next meet in mid-June," Adams said in a note. "While inflation is likely past the peak in the United States, it has gained considerable momentum over the last two years, and is likely to close 2022 well above the Federal Reserve's 2% objective (measured by the price deflator for personal consumption expenditures, not the PPI)."
Despite the report, the yield on the 10-year Treasury note fell 6 basis points to 2.85%.
Also this morning, the number of jobless claims totaled 203,000, nearly unchanged from 202,000 the previous week. Economists had forecast 190,000, according to Econoday.
Dutch Bros Plunges; Haven Stock Is No Longer
In major stock market movers, Dutch Bros plummeted more than 35% and is now below the 23 price of its IPO on Sept. 15. The chain of drive-through coffee shops lowered its outlook for 2022. The company said inflation is pressuring margins.
AmerisourceBergen gapped below its 50-day moving average in heavy volume, a break of support that indicates a sell signal. Walgreens Boots Alliance said it sold 6 million shares of AmerisourceBergen at $150 each, reducing its stake from 28.1% to 25.2%.
AmerisourceBergen said today it is resuming share repurchases, and plans to pay down $2 billion in debt within two years of the June 2021 acquisition of Alliance Healthcare. The stock is normally viewed as a haven because it is a provider of essential products and historically is a steady performer. But the stock market correction has shown no mercy.
Rivian stock rose 7% in heavy volume after the electric-pickup truck maker maintained its 2022 production guidance. The news followed its first-quarter report late Wednesday, when Rivian missed revenue expectations and posted a larger loss than expected.
On Wednesday, Rivian stock fell to another record low after Ford said it sold 8 million Rivian shares.
