Monday 10 May 2021 3:45 pm

Wall Street closes lower on inflation jitters

Wall Street closed lower on today as inflation fears drove investors away from market-leading growth stocks in favour of cyclicals, which stand to benefit most as the economy reopens.

Industrial and healthcare shares limited the Dow’s decline but the blue-chip average reversed course late in the session to snap a three-day streak of record closing highs.

The Dow Jones Industrial Average fell 32.6 points, or 0.09 per cent, to 34,745.16, the S&P 500 lost 44.09 points, or 1.04 per cent, to 4,188.51 and the Nasdaq Composite dropped 350.38 points, or 2.55%, to 13,401.86.

The close was disappointing for American markets, which only earlier in the day were in track for a record high.

In the early afternoon, the Dow Jones Industrial Average hit a record high, rising 0.5 per cent on hopes that interest rates would remain lower for longer.

Meanwhile London’s FTSE 100 also slipped this afternoon as the pound rose above $1.41 for the first time since February and investors awaited government plans for easing Covid restrictions.

The blue-chip index closed down 0.08 despite miners BHP Group and Rio Tinto providing boosts as copper prices touched record highs on hopes for improved demand.

The index was weakened as large dollar-earning firms including Unilever and Diageo slipped due to a stronger pound.

Meanwhile, the mid-cap FTSE 250 dropped 0.34 per cent, despite bakery chain Greggs surging 10.5 per cent after raising its profit outlook.

Market movers

The afternoon’s biggest winner was property developer Berkeley Group, who rose 4.5 per cent, followed by Barclays, up by 2.9 per cent.

Banking group Lloyds and NatWest also rose 2.8 per cent and 2.5 per cent respectively.

Betting firm Flutter Entertainment was the morning’s biggest faller, dropping 3.6 per cent, followed by Renishaw’s 2.9 per cent hit.

Meanwhile, hotel firm Whitbread and Rightmove both dipped by 2.9 per cent and 2.7 per cent respectively.

Around the world

Japanese shares gained today, as a strong finish last week on Wall Street boosted risk appetite, while local investors looked to corporate earnings for signs of progress in a Covid-hit economy.

The Nikkei share average rose 0.55 per cent, while the broader Topix jumped by almost one per cent.

Meanwhile, the S&P 500 was down 0.3 per cent as a slide in technology shares offset a surge in commodity-linked energy and material stocks.

Elsewhere, the pan-European Stoxx 600 dipped 0.1 per cent after hitting a fresh all-time high in early trading.