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US Stocks Slip Tuesday on Weak Earnings08/09 16:18

   Stocks on Wall Street extended their recent run of losses Tuesday as 
investors reviewed disappointing earnings reports and looked ahead to the 
release of an inflation snapshot closely watched by the Federal Reserve.

   (AP) -- Stocks on Wall Street extended their recent run of losses Tuesday as 
investors reviewed disappointing earnings reports and looked ahead to the 
release of an inflation snapshot closely watched by the Federal Reserve.

   The S&P 500 fell 0.4%, marking its fourth consecutive drop. The Dow Jones 
Industrial Average fell 0.2% and the Nasdaq slid 1.2%.

   Smaller company stocks also gave up ground, sending the Russell 2000 index 
1.5% lower.

   Technology companies and retailers were the biggest drags on the market, 
outweighing gains in energy, financials and elsewhere. Bond yields rose broadly.

   The selling likely reflects profit-taking by investors ahead of Wednesday's 
consumer price index report, said Sameer Samana, senior global market 
strategist at Wells Fargo Investment Institute.

   The headline figure is expected to show a smaller annual increase in July 
than in June, according to FactSet. But core inflation, which strips out 
volatile energy and food costs, leaving rent and other big-ticket purchases, is 
expected to come in higher than in June.

   "With core (inflation) being the more important of the two, the fact that it 
hasn't peaked yet and may not peak for a few months to come, given how much 
momentum we're seeing in rent increases, in wage increases, that's going to be 
the real problem for the Fed," Samana said. "How to cool that down, especially 
when the economy is adding as many jobs as it is?"

   The S&P 500 fell 17.59 points to 4,122.47. The Dow slipped 58.13 points to 
close at 32,774.41. The Nasdaq dropped 150.53 points to 12,493.93. The Russell 
2000 ended down 28.31 points at 1,912.89.

   After a surprisingly strong 9.1% gain in July, the benchmark S&P 500 index 
has been mostly selling off this month as Wall Street tries to gauge how 
aggressively the Federal Reserve will continue to raise interest rates in order 
to combat inflation and what that will mean for the economy and corporate 
profits.

   The U.S. Labor Department will release its July report for consumer prices 
Wednesday, followed by its producer prices report on Thursday. Investors and 
economists will look for any signs that the Federal Reserve's aggressive rate 
hikes the past few months have helped to bring inflation under control.

   "Regardless of that number, there's still going to be an environment where 
they're raising rates," said Michael Landsberg, chief investment officer of 
Landsberg Bennett Private Wealth Management.

   The Fed has raised rates four times this year in an effort to hit the brakes 
on the economy and cool the hottest inflation in four decades. Wall Street is 
worried that the central bank could slam the brakes too hard and tip the 
economy into a recession. Last week's strong July jobs report has most 
economists predicting the Fed will again raise short-term interest rates by as 
much as another three-quarters of a point at its September meeting.

   Most economic data already points to a slowdown. The U.S. economy has now 
contracted for two straight quarters, which constitutes an informal indicator 
of a recession. But recession fears have been tempered by a hot jobs market 
with unemployment at historic lows. While that's good for the economy, it's a 
sign that inflation persists.

   Investors have also been closely watching the latest round of corporate 
earnings and economic data for clues on how inflation is hurting consumers and 
businesses.

   Chipmaker Micron Technology fell 3.7% after warning investors that revenue 
could fall short of forecasts because of weakening demand. That warning hit 
other chipmakers hard, with Nvidia shedding 4%.

   Norwegian Cruise Line plunged 10.6% for the biggest drop in the S&P 500 
after reporting disappointing financial results and giving investors a weak 
revenue forecast. The weak results weighed down travel-related stocks. Expedia 
fell 1.6% and American Airlines fell 2.7%.

   As the earnings season winds down, Disney, Wendy's and Wynn Resorts will be 
reporting quarterly results this week.

   Also on Tuesday, audience rating company Nielsen surged 21.2% after it 
announced progress on a deal to be acquired by private equity firms.

   Bond yields rose. The yield on the 10-year Treasury rose to 2.79% from 2.75% 
late Monday.

 
 
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