Dow Drops 100 Points; US Budget Deficit Narrows Sharply In June

U.S. stocks traded mixed toward the end of trading, with the S&P 500 and Nasdaq Composite moving higher on Wednesday. The annual inflation rate in the US increased to 9.1% in June, the highest level since November 1981.

The Dow traded down 0.33% to 30,879.50 while the NASDAQ rose 0.24% to 11,292.14. The S&P also fell, dropping, 0.04% to 3,817.26.

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Leading and Lagging Sectors

Consumer discretionary shares rose by 1.6% on Wednesday. Meanwhile, top gainers in the sector included Stitch Fix, Inc. SFIX, up 18% and Boxed, Inc. BOXD up 30%.

In trading on Wednesday, industrials shares dipped by 0.7%.

Top Headline

Delta Air Lines, Inc. DAL reported weaker-than-expected earnings for its second quarter on Wednesday.

Delta Air Lines reported a second-quarter FY22 adjusted operating revenue decline of 1% from 1Q19 to $12.31 billion. GAAP operating revenue was $13.82 billion, a growth of 10% from 1Q19. Analysts expected the company to report revenues of $13.40 billion. Adjusted EPS was $1.44 below the consensus of $1.64.

Equities Trading UP

Boxed, Inc. BOXD shares shot up 30% to $2.1099 after Wells Fargo initiated coverage on the stock with an Overweight rating and announced a price target of $8.

Shares of ironSource Ltd. IS got a boost, shooting 53% to $3.42 after the company announced an all-stock merger agreement with Unity Software at an approximate $4.4 billion.

XORTX Therapeutics Inc. XRTX shares were also up, gaining 46% to $1.8001 after the company announced topline results from Part 1 of the 3 part Pharmacokinetics Bridging Study showed a substantial increase in oral bioavailability of two versions of its proprietary oxypurinol formulation.

Equities Trading DOWN

Humanigen, Inc. HGEN shares tumbled 80% to $0.5888 after the company was informed of preliminary topline results showing its ACTIV-5/BET-B trial did not achieve statistical significance on the primary endpoint. Roth Capital, HC Wainwright & Co. and Cantor Fitzgerald downgraded the stock to Neutral.

Shares of Applied Genetic Technologies Corporation AGTC were down 53% to $0.3972 after the company announced pricing of a $10 million underwritten public offering.

Atara Biotherapeutics, Inc. ATRA was down, falling 55% to $3.9150 after the company completed a planned interim analysis of the ATA188 Phase 2 study. A safety monitoring committee said it believes the six-month interim endpoint may be an inaccurate measure. Stifel and JP Morgan downgraded their ratings on the stock.

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Commodities

In commodity news, oil traded up 0.6% to $96.42, while gold traded up 0.6% to $1,735.10.

Silver traded up 1.3% to $19.205 on Wednesday while copper rose 1.1% to $3.3255.

Euro zone

European shares closed lower today. The eurozone’s STOXX 600 fell 1.01%, London’s FTSE 100 fell 0.74% while Spain’s IBEX 35 Index fell 0.87%. The German DAX dropped 1.16%, French CAC 40 fell 0.73% and Italy’s FTSE MIB Index fell 0.93%.

The annual inflation rate in France increased to 5.8% in June, the highest since July 1985, while annual inflation rate in Germany eased for the first time in five months to 7.6% in June. Annual inflation rate in Spain accelerated to 10.2% in June from 8.7% in May.

The UK trade deficit shrank to GBP 9.7 billion in May from a revised GBP 9.8 billion in the prior month, while industrial production increased by 0.9% from a month ago in May. The British economy grew 0.5% month-over-month in May following a 0.2% contraction in the previous month.

Economics

The annual inflation rate in the US increased to 9.1% in June, the highest level since November 1981, compared to 8.6% in May and also higher than analysts’ expectations of 8.8%.

US crude-oil inventories climbed 3.3 million barrels last week, the Energy Information Administration said.

The Federal Open Market Committee released its Beige Book report.

The US government budget deficit shrank to $89 billion in June from $174 billion in the year-ago period.

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COVID-19 Update

The U.S. has the highest number of coronavirus cases and deaths in the world, reporting a total of 90,683,220 cases with around 1,046,610 deaths. India confirmed a total of at least 43,672,150 cases and 525,510 deaths, while Brazil reported over 33,005,270 COVID-19 cases with 674,160 deaths. In total, there were at least 563,110,390 cases of COVID-19 worldwide with more than 6,377,010 deaths.