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US stocks close mostly lower as investors weigh inflation concerns against earnings strength

Traders work on the floor of the New York Stock Exchange (NYSE) on March 20, 2020 in New York City.

Photo by Spencer Platt/Getty Images

  • US stocks gave up gains Monday as investors continue to weigh rising inflation against corporate earnings.
  • Consumer price index data is due out Thursday, and economists expect a 40-year high of 7.2%.
  • Tyson Food’s earnings report revealed a surge in beef and chicken prices in its recent quarter.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

US stocks gave up gains Monday, with the S&P 500 and Nasdaq reversing lower while the Dow closed flat, as investors weigh rising inflation against continued strength in corporate earnings results.

Consumer price index data is due this Thursday, and economists expect a 7.2% surge in prices, which would be the highest level in 40 years. Such a high reading in CPI data later this week could goad the Federal Reserve to be more aggressive with its interest rate hikes.

Tyson Foods’ earnings results revealed big hikes in its beef and chicken prices due to strong demand from consumers and a lack of product supply. Tyson raised its beef prices by more than 30%, while its chicken prices rose about 20%.

Here’s where US indexes stood at the 4:00 p.m. ET close on Monday:

  • S&P 500: 4,483.87, down 0.37%
  • Dow Jones Industrial Average: 35,091.13, even (up 1.39 points)
  • Nasdaq Composite: 14,015.67, down 0.58%

Despite the risk of inflation and higher interest rates, corporate earnings continue to beat investor expectations. Of the 54% of S&P 500 companies that have reported earnings so far, 88% beat profit estimates by a median of 6%, according to data from Fundstrat. Meanwhile, 75% of reported companies have beat revenue estimates by a median of 5%. 

A proposed merger of equals between Spirit Airlines and Frontier was announced on Monday, which if completed would make it the fifth largest airline in the US with a total market share of about 5%. Both budget airlines are focused on regional domestic flights.

More merger talk helped shares of beaten-down Peloton surge about 30% in early Monday trades amid speculation that the company is seeing interest from potential acquirers like Amazon and Nike. Wedbush analyst Dan Ives argued that Apple could swoop in and buy the connected fitness company in what would be its largest acquisition ever.

Bitcoin’s weekend rally continued on Monday, with the popular cryptocurrency reclaiming its 50-day moving average at $42,800. The run higher is giving bullish crypto investors hope that the recent bear market is nearing its end.

The volatility of bitcoin has led to losses for companies that added the cryptocurrency to their balance sheet. Tesla logged a $101 million impairment loss from bitcoin in 2021.

CF Acquisition, the SPAC buying Rumble, soared as much as 43% after the YouTube competitor offered Joe Rogan $100 million over four years to ditch Spotify and join their platform. 

West Texas Intermediate crude oil fell as much as 0.96% to $91.42 per barrel. Brent crude, oil’s international benchmark, fell as much as 0.56% to $92.75 per barrel.

Gold rose as much as 0.82% to $1,822.70 per ounce. The yield on the 10-year Treasury was flat at 1.92%.

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