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Stocks fall as investors brace for inflation data

U.S. stocks closed lower on Tuesday as rising commodity prices and labor shortages fed fears that near-term price spikes could translate into longer-term inflation ahead of two inflation updates this week. Conway G. Gittens has more on the market action.

Inflation jitters ahead of consumer price and producer price data later in the week knocked Wall Street off its feet on Tuesday.

The Dow tumbled 473 points. The S&P 500 was down 36 points. The Nasdaq lost 12 points.

Inflation fears, particularly wage inflation, were set off by a record number of job openings in March. Employers sought to fill more than 8.1 million jobs at a time when there are still millions of Americans who are unemployed. The data added fuel to a debate as to whether high unemployment benefits are preventing millions of Americans from returning to work - resulting in a labor shortage. Investors fear employers are going to have to offer bigger paychecks to fill open positions. And that's not the only inflation risk out there to spook investors, says O'Neil Global Advisors Chief Investment Officer Randy Watts.

"In addition, commodities are up a great deal. And then finally this week, what with the cyber attack in the pipeline shutdown, you look at gasoline, that's up 50 percent in some areas year to date. And so I think there's a lot of things that are percolating right now that are leading to higher inflation. All of this results in pressure on price-earnings multiples for stocks."

Shares of Boeing finished lower. Boeing continues to struggle with the revival of the 737 MAX. Last month it only delivered four of its best-selling aircraft. It's had to halt deliveries due to an electrical problem that re-grounded part of the fleet. It was only a few months ago that it even got the green light to fly again after two deadly crashes caused a worldwide safety ban.

And...A shake-up is coming to L Brands. The retail company will split into two publicly-traded entities: Bath & Body Works and Victoria's Secret. The split is expected to be finalized in August.


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