US stocks fell, led by technology shares on Nasdaq, as investors weighed recent inflation data contrasted with positive news from the airline industry. Technical stocks in general are falling. Salesforce.com, Inc. (CRM) is the worst performing stock in the Dow Jones Index. Shares of Microsoft Corporation (MSFT) fell 2%, while shares of Tesla, Inc. (TSLA) for the first time in four sessions.
However, at least one sector flew to the top. Airline prices rose after Delta Air Lines (DAL) said it expects flight disruptions caused by the omicron variable to ease soon. The travel sector also got a boost from a report that Boeing’s (BA) 737 Max could be allowed to resume service in China as early as this month. Boeing shares are up about 4%. Shares of cruise lines and other travel-related companies are also advancing.
- US stocks fell, led by technology shares on the Nasdaq, as investors weighed recent inflation data.
- Meanwhile, the airline sector posted gains after Delta said it expects to ease flight disruptions caused by the omicron variable.
- Oil futures contracts are fixed, while the yield on 10-year Treasuries is fixed.
Oil, cryptocurrency, treasury bonds
Oil futures contracts are fixed. The price of natural gas is dropping after the big rally over the past week. The yield on the 10-year Treasury is fixed at 1.72%.
The recent rally in cryptocurrencies has stalled, with Bitcoin, Ether and XRP trading lower. The dollar is lower against the euro.
Chart for the day: Product price pause
Inflation at the wholesale level eased slightly last month, as food and energy costs fell. However, the annual increase has remained close to levels not seen since records began in 2010.
The Labor Department reported that the producer price index for final demand (PPI) rose 0.2% in December, down from the revised 1% jump the previous month. However, prices remained significantly higher than the previous year, with the 9.7% year-over-year increase remaining near the highest revised rate in November of 9.8%. The monthly and annual gains were below economists’ expectations.
Core Producer Price Index, which does not include volatile food and energy prices, jumped 8.3% year over year, more than expected. Final demand prices for services increased by 0.5% compared to November, while prices for goods increased by 0.4%. Energy prices fell 3.3%, and the cost of food fell 0.6%. The biggest price increases were in transportation.
This report comes on the heels of the Consumer Price Index (CPI) released yesterday, which showed retail inflation rising at an annualized rate of 7% in December.
Today’s stock: DAL, Delta Airlines
Delta Air Lines, the largest airline by revenue, jumped after fourth-quarter results beat expectations. Delta also said that demand for flights will increase soon, and is forecasting a profit for 2022. The carrier expects a first-quarter loss due to the decline in air travel caused by the omicron variable spread of COVID-19.
CEO Ed Bastian cited omicron-affected employment levels and the disruption to travel across the industry, but noted that Delta operations had stabilized over the past week and returned to pre-holiday performance. He expected that the effects of the virus would delay the recovery of demand by 60 days.
President Glenn Hauenstein said that because of this delay, first-quarter revenue will be 72% to 76% of 2019 levels, and added that “recovery momentum” will resume after the President’s Day holiday and beyond.
Delta generated fourth-quarter sales of $9.47 billion, with earnings per share of $0.22, beating analysts’ expectations. It was the company’s highest quarterly revenue since late 2019 as holiday and business travel improved.
Delta Air Lines shares are up 3% today. They have lost 28% of their value since the outbreak of the pandemic in 2020.
In other news:
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Citigroup options traders (C) show an increase in the upside
Set savings goals (even for the fun stuff) (balance)
Summary of Delta Air Lines earnings report for the fourth quarter of 2021
JPMorgan Chase (JPM) – FY21 Fourth Quarter Earnings Report Preview: What To Look For
Brainard says the Fed’s “most important task” is to control inflation (Reuters)
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Robinhood says it will offer permanent remote work for most employees (CNBC)