Stocks fall as market turns choppy amid inflation concerns

A sign for Wall Street is carved in the side of a building on Nov. 5, 2020 in New York. Stocks are opening lower on Wall Street, Wednesday, Nov. 17, 2021, pulling the S&P 500 further below the record high it set last week. (AP Photo/Mark Lennihan, File)

Stocks fell on Wall Street Wednesday as the broader market takes a choppy turn amid lingering concerns about rising inflation.

The S&P 500 fell 0.2% as of 1:10 p.m. Eastern. The losses pulled the benchmark index further below the record high it reached on Nov. 8. The Dow Jones Industrial Average fell 144 points, or 0.4%, to 35,997 and the Nasdaq fell 0.4%.

Smaller company stocks fell more steeply than the broader market in a sign that investors were nervous about economic growth. The Russell 2000 fell 1.2%.

Financial, technology and industrial stocks led the losses. Morgan Stanley fell 3% and Deere shed 2.6%.

Visa fell 5.7% after after Amazon said it would no longer accept Visa cards issued in the U.K. in a dispute over fees. Payments processing rival Mastercard fell 4.3%.

A mix of health care companies and companies that rely on direct consumer spending held up better than the rest of the market.

Bond yields edged fell. The yield on the 10-year Treasury fell to 1.61% from 1.63% late Tuesday.

Major indexes have been choppy as investors shift focus following several weeks of solid corporate earnings. A series of worrisome reports on inflation tripped up stocks last week and the broader market has been swaying between gains and losses so far this week.

Investors reviewed more corporate report cards from retailers following a solid report on Tuesday showing that retail sales jumped in October. T.J. Maxx and Marshalls parent TJX rose 7.9% after reporting strong third-quarter financial results. Home improvement retailer Lowe's gained 0.8% as it raised its revenue forecast for the year following strong third-quarter financial results.

Investors are closely watching retail sales reports and retailer earnings as they try to gauge just how much rising inflation is impacting business operations and consumer spending. Many companies have warned that profit margins could suffer as they face supply chain problems and higher costs overall. Consumers have been absorbing higher prices on a wide range of goods and that has investors worried about the potential for a pullback in spending.

The latest earnings reports reflect some of the damage from rising inflation. Target, which reported mostly solid financial results, also saw its margins tighten because of higher merchandise, freight and supply chain costs. It's stock fell 4.5%.

Walmart reported similarly solid financial results on Tuesday, but also revealed that inflation hurt its profit margins.

Macy's will report its latest financial results on Thursday.

Investors received a mixed report on the housing market. Construction of new homes in the U.S. fell 0.7% in October, but a big jump in the number of permits last month points to anticipation by builders that supply chain problems that have dogged them for much of the year will soon ease. Homebuilders were mixed following the report.