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10 Feb 2021 | 15:45

US open: Major indices in the red amid rotation out of tech stocks

(Sharecast News) - Wall Street stocks were in the red early on Wednesday as major indices looked set to reverse some of the gains recorded in their February rally amid a rotation out of technology stocks and some key inflation data. As of 1545 GMT, the Dow Jones Industrial Average was down 0.11% at 31,342.56, while the S&P 500 was 0.20% softer at 3,903.25 and the Nasdaq Composite started out the session 0.47% weaker at 13,942.56.

The Dow opened 33.27 points lower on Wednesday, extending yesterday's small loss that narrowly put a stop to a multi-day winning streak for the index.

Corporate earnings were again in focus on Wednesday, with Twitter, Lyft, Yelp, Mattel and Cisco all posting better-than-expected earnings overnight.

Coca-Cola topped fourth-quarter earnings per share estimates by $0.05 despite posting a 5% drop in revenues, while Under Armour came in ahead of quarterly revenue estimates on the back of an online sales boost.

General Motors reported a 22% increase in quarterly revenue, while Spirit Airlines, Western Union, MGM Resorts and Uber will all post earnings following the close.

Despite solid earnings from several corporate giants, driving the market on Wednesday was a rotation out of tech stocks, with shares in Amazon, Apple, Alphabet, Microsoft and Netflix all sliding into negative territory.

On the macro front, increased mortgage interest rates over four of the first six weeks of 2021 have seemingly dented mortgage demand, with overall mortgage application volume falling 4.1% week-on-week as the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $548,250 increased to 2.96% from 2.92%, according to the Mortgage Bankers Association.

Elsewhere, the core consumer price index rose 0.3% on a monthly basis, matching expectations from economists, but increased 1.4% year-on-year in January, according to the Labor Department, as the broader CPI once again got a boost from higher gasoline prices.

Lastly, wholesale inventories in the US increased 0.3% month-on-month in December, according to the Census Bureau, after being unchanged in November and above a preliminary estimate of a 0.1% advance.

Still to come, the US 2021 full-year budget plan will be released at 1730 GMT, while comments from Fed chair Jerome Powell before the Economic Club of New York and the publication of January's monthly budget statement will both come at 1900 GMT.
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