Stocks Slide Following Jobs and Inflation Data

U.S. stocks dropped, led by tech shares in the Nasdaq, as investors weigh the latest inflation data mixed with positive news from the airline industry. Tech stocks in general are losing ground., Inc. (CRM) is the worst-performing stock in the Dow. Shares of Microsoft Corporation (MSFT) are 2% lower, while Tesla, Inc. (TSLA) declined for the first time in four sessions.

Still, at least one sector flew higher. Airlines are up after Delta Air Lines, Inc. (DAL) said that it expects the flight disruptions caused by the omicron variant will ease soon. The travel sector also got a boost from a report that The Boeing Company's (BA) 737 Max jetliner could be allowed to resume service in China as early as this month. Boeing shares are rising almost 4%. Shares of cruise lines and other travel-related companies are advancing as well.

Key Takeaways

  • U.S. stocks dropped, led by tech shares in the Nasdaq, as investors weigh the latest inflation data.
  • Meanwhile, the airline sector posted gains after Delta said that it expects the flight disruptions caused by the omicron variant to ease.
  • Oil futures are flat, while the yield on the 10-year Treasury note is holding steady.

Oil, Crypto, Treasury Note

Oil futures are flat. The price of natural gas is sinking after its big runup over the past week. The yield on the 10-year Treasury note is holding at 1.72%.

The recent rally in cryptocurrencies has stalled, with Bitcoin, Ether, and XRP trading lower. The dollar is lower versus the euro.

Chart of the Day: Producer Price Pause

Inflation at the wholesale level eased a bit last month, as costs of food and energy declined. However, the yearly increase remained near levels not seen since records began in 2010.

The Labor Department reported the Producer Price Index for final demand (PPI) rose 0.2% in December, a decline from the revised 1% jump the month before. However, prices remained significantly elevated from a year earlier, as the 9.7% year-over-year increase remained near November's revised high of 9.8%. Both the monthly and yearly gains were less than economists' forecasts.

The core PPI, which leaves out volatile food and energy prices, jumped 8.3% year over year, more than expected. Final demand prices for services increased 0.5% from November, while the price of goods advanced 0.4%. Energy prices dropped 3.3%, and the cost of food declined 0.6%. The largest increases in prices were in transportation. 

 The report follows yesterday’s Consumer Price Index (CPI), which showed retail inflation increased at an annual rate of 7% in December.

Stock of the Day: DAL, Delta Air Lines

Delta Air Lines, the biggest carrier by revenue, jumped after fourth-quarter results topped forecast. Delta also said that demand for flights will increase soon, and it anticipates a profit for 2022. The carrier expects a first-quarter loss because of the decline in air travel caused by the spread of the omicron variant of COVID-19. 

CEO Ed Bastian noted omicron-affected staffing levels and disrupted travel across the industry, but he indicated Delta's operations have stabilized over the past week and returned to pre-holiday performance. He expected the effects of the virus to delay demand recovery by 60 days.

President Glen Hauenstein said that, because of that delay, first quarter revenue will be 72% to 76% of 2019 levels. He added the "recovery momentum" would resume after the President’s Day weekend and beyond.

Delta had fourth quarter sales of $9.47 billion, with earnings per share of $0.22, beating analysts' forecasts. 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've lost 28% of their value since the pandemic struck in 2020.

In Other News:

Alternative Asset Management Firm TPG Launches IPO

Citigroup (C) Option Traders Show Increasing Bullishness

Set Savings Goals (Even For Fun Stuff) (The Balance)

Delta Air Lines Q4 2021 Earnings Report Recap

JPMorgan Chase (JPM) Q4 FY 2021 Earnings Report Preview: What to Look For

Fed's 'Most Important Task' Is to Control Inflation, Brainard Says (Reuters)

More Than 8,000 Kroger Workers in Denver Have Gone on Strike Demanding Better Pay, Benefits, and Working Conditions (Yahoo! News)

Robinhood Says It Will Offer Permanent Remote Working to Most Employees (CNBC)

Originally written by
Bill McColl
Bill McColl

Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time.

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  1. U.S. Bureau of Labor Statistics. "Producer Price Index News Release Summary."

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