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US stocks fell slightly; Investors Eye Musk, drama on Twitter | Economic news

By DAMIAN J. TROISE, AP Business Writer

NEW YORK (AP) — Stocks fell slightly in afternoon trading on Wall Street on Thursday as investors scrutinized the latest economic data and corporate earnings amid lingering concerns about inflation and the rise in interest rates.

The S&P 500 fell 0.7% at 12:30 p.m. EST. The Dow Jones Industrial Average rose 3 points, or less than 0.1%, to 34,568 and the Nasdaq fell 1.6%.

Industrials and companies that manufacture household and personal goods gained ground. Caterpillar rose 4% and Delta Air Lines 1.8%.

Tech stocks fell and reversed gains elsewhere in the market. The expensive valuations of many of the biggest tech companies give them more leverage to steer the broader market up or down. Microsoft slipped 1.9%.

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Investors once again turned their attention to the drama surrounding Tesla founder and CEO Elon Musk and Twitter. Musk offered to buy the social media company for $54.20 per share, two weeks after revealing he had accrued a 9% stake.

Musk criticized Twitter for failing to uphold free speech principles and said in a regulatory filing that it should be turned into a private company. Twitter’s stock rose 1% to $46.30, well below Musk’s offer price.

Wall Street had mixed economic data to review after several hot inflation reports earlier in the week. The Commerce Department said retail sales rose 0.5% in March, boosted by higher gasoline prices as consumers continued to spend despite high inflation.

Inflation remains at its highest level in 40 years in the United States and that forces economists and analysts to closely monitor the reaction of consumers to the rising prices of everything from food to clothing to essence. Inflation concerns escalated with Russia’s invasion of Ukraine, which made energy prices more volatile and contributed to rising oil and wheat prices globally.

U.S. crude oil prices were relatively flat on Thursday, but rose about 40% for the year.

The head of the International Monetary Fund warned on Thursday that Russia’s war on Ukraine is weakening economic prospects for most countries in the world and reiterated the danger that high inflation poses to the global economy.

Rising prices are prompting the Federal Reserve and many other central banks to tighten monetary policy by raising interest rates, among other measures, to help calm the growing demand that is contributing to the problem.

Bond yields have mostly risen as Wall Street braces for higher interest rates. The 10-year Treasury yield rose to 2.80% from 2.72% on Wednesday night.

Investors received another update on the job market recovery. The number of people applying for unemployment benefits rose last week, according to the Labor Department, but remained at a historic low. The data reflects a robust US labor market with near-record job openings and few layoffs.

Earnings season is underway and Thursday featured reports from insurer UnitedHealth Group and several banks.

UnitedHealth gave up an early gain and remained essentially unchanged after reporting strong first-quarter results and raising its 2022 guidance.

Investors had mixed reactions to the results of four of the country’s biggest banks, which all reported notable declines in first quarter profits as market volatility and the war in Ukraine led to a drying up of transactions, while that a slowdown in the real estate market meant fewer people were looking for mortgages.

Citigroup rose 1.1% while Wells Fargo fell 4.5%. Morgan Stanley rose 0.9% and Goldman Sachs fell 0.5%.

Investors are watching the latest round of corporate earnings closely to see how companies have handled rising costs and whether consumers have cut spending.

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Margarita W. Wilson

The author Margarita W. Wilson