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Wall Street Opens Mixed Ahead of Fed Meeting; Tesla Slips; Dow Flat

Stock Markets3 hours ago (Nov 02, 2021 14:38)

© Reuters.

By Geoffrey Smith — U.S. stock markets opened mixed on Tuesday as investors largely marked time ahead of the Federal Reserve’s two-day meeting which starts later. 

Expectations are that the Fed will start to phase out its bond purchases, which have run at $120 billion a month since early last year, to reflect the progress made by the economy this year – and the increasing nervousness about a rise in inflation that seems set to last longer than originally predicted. 

“U.S. policymakers are quietly abandoning the ‘transitory inflation’ argument, and the likelihood of rising prices and interest rates is higher than it’s been in the last several years,” said Sonal Desai, chief investment officer for fixed income with Franklin Templeton in a blog post at the weekend. 

By 9:45 AM ET (1345 GMT), the Dow Jones Industrial Average was down 8 points, only minutely below the record high close it set on Monday. The S&P 500 and Nasdaq Composite, which also closed at record highs, were both up 0.1%.

Tesla (NASDAQ:TSLA) stock quickly overcame its premarket dip, paring a loss of 5% before the open to be down only 0.6%. The stock had fallen after CEO Elon Musk tweeted that Hertz Global has yet to sign a contract for the 100,000 Tesla Model 3 cars that it said it  would add to its fleet by the end of 2022 last week.  Hertz stock, by contrast, fell 8.9%.  Tesla is also having to recall nearly 12,000 cars because of safety issues, according to an NHTSA release. 

The car hire sector more broadly was on fire: Avis Budget (NASDAQ:CAR) stock was suspended, up 35%, after an earnings report that showed solid earnings in the third quarter and drove a $1 billion increase in the company’s buyback program. 

Also up by over 40% was the special purpose acquisition company SilverBox Engaged Merger Corp I (NASDAQ:SBEA), which announced it will merge with Black Rifle Coffee Company, a coffee subscription service that caters primarily to U.S. military veterans. 

Going in the other direction was education technology company Chegg. Chegg (NYSE:CHGG) stock fell 44% after its third-quarter results fell short of expectations and management guided for an even weaker fourth quarter, reflecting an unexpected slowdown in the U.S. tuition market.

Another decliner was Lucid Group (NASDAQ:LCID), which fell 7.6% after a blistering rally over the last week tied to the start of customer deliveries. 

On a heavy day for earnings, Under Armour (NYSE:UA) stock rose 18.5% after the apparel maker raised its guidance for the third time this year. Estee Lauder  (NYSE:EL)r edged up 0.6% despite the cosmetics group warning of supply-chain issues in its quarterly update, while Pfizer (NYSE:PFE) stock rose 2.0% and BioNTech (NASDAQ:BNTX) stock rose 3.7% after the former sharply revised up its estimate of how much their Covid-19 vaccine will bring in this year.

Fellow vaccine-maker Novavax (NASDAQ:NVAX) saw its stock rise 4.8% after Indonesia became the world’s first country to authorize its anti-Covid drug. The company’s CEO told Reuters that Novavax expects to file its much-delayed submission for authorization from the U.S. Food and Drug Administration within “several weeks.”

Wall Street Opens Mixed Ahead of Fed Meeting; Tesla Slips; Dow Flat

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