Elon Musk to acquire Twitter, experts say consumers could be at risk
The social media giant confirmed Monday the Tesla CEO and billionaire will acquire the company in a deal worth $44 billion.
Scott L. Hall, USA TODAY
NEW YORK — Stocks fell in morning trading on Wall Street Tuesday as markets remain turbulent amid a busy week of earnings from some of the nation’s biggest companies.
Microsoft and Google’s parent company, Alphabet, were among the bigger weights on the market in early trading. Both of them will report their latest quarterly results after the closing bell.
The S&P 500 fell 1.5%, The Dow Jones Industrial Average fell 1% and the Nasdaq fell 2.5%. General Electric slumped after its own earnings report, and Twitter was down a day after reaching an agreement to be taken private by Tesla CEO Elon Musk.
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The weak opening follows a similar start on Monday that turned into a late rally, partially led by technology stocks after Twitter agreed to sell itself to Tesla CEO Elon Musk. The social media company fell 2.1% Tuesday.
Technology stocks were once again directing the broader market and had some of the biggest losses. Companies in the sector, with their pricey values, tend to push the market up or down more forcefully. Microsoft fell 2.1% and Apple shed 2%. Both companies will report their latest financial results later Tuesday.
Retailers and other companies that rely on direct consumer spending also fell broadly. General Motors, which also reports its latest results later Tuesday, slipped 2.8%. Tesla slumped 7.3% and Nike fell 2.9%.
General Electric fell 10% for one of the sharpest losses on the market after telling investors that inflation and other pressures are weighing on its profit forecast for the year.
Facebook earnings on deck
Bond yields fell sharply. The yield on the 10-year Treasury fell to 2.75% from 2.82% late Monday.
Energy companies gained ground along with a 1.6% rise in U.S. crude oil prices. Valero Energy rose 2.6%.
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Earnings remain a key focus of Wall Street for the rest of the week. Airplane maker Boeing reports its results on Wednesday, along with Facebook parent, Meta. Industrial bellwether Caterpillar reports its results on Thursday, along with McDonald’s and Amazon.
Investors are closely reviewing the latest round of corporate report cards to get a better sense of how different industries are handling rising inflation, which has prompted many companies to raise prices. The results will also give a clearer picture of how consumers are reacting to higher prices on everything from food to clothing and gasoline.
Fed’s Powell on inflation
Persistently rising inflation has prompted the Federal Reserve to shift its monetary policy in order to aggressively fight inflation. The chair of the Fed, Jerome Powell, has indicated the central bank may hike short-term interest rates by double the usual amount at upcoming meetings, starting next week. It has already raised its key overnight rate once, the first such increase since 2018.
Economists and investors are concerned that the U.S. economy might slow sharply or even fall into a recession because of the big interest-rate increases the Fed is expected to push through.