US STOCKS-Wall Street closes lower on inflation jitters

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(Updates to market close)
By Stephen Culp
NEW YORK, May 10 (Reuters) - Wall Street closed lower on
Monday as inflation fears drove investors away from
market-leading growth stocks in favor of cyclicals, which stand
to benefit most as the economy reopens.
Industrial and healthcare shares limited the Dow's decline
but the blue-chip average reversed course late in the session to
snap a three-day streak of record closing highs.
"The market leadership is not doing all that well this
year," said Paul Nolte, portfolio manager at Kingsview Asset
Management in Chicago. "There's been a general rotation away
from growth to other parts of the market."
A demand resurgence is colliding with strained supply of
basic materials, helping to fuel inflation worries.
"Once the supply lines are rebuilt this will go away. But
it's going to take some time," Nolte added. "It's different from
flipping on a light switch."
The break-even rate on five-year and 10-year U.S. Treasury
Inflation-Protected Securities (TIPS) touched their highest
levels since 2011 and 2013, respectively. "There's still some push and pull as to whether the market
believes inflation is transitory or something that's going to
stick around," Nolte said.
Inflation concerns will be in the minds of investors when
the Labor Department releases its latest CPI report on
Wednesday.
A shutdown to halt a ransomware attack on the Colonial
Pipeline entered its fourth day, hobbling a network which
transports nearly half of the East Coast's fuel supplies.
Unofficially, the Dow Jones Industrial Average .DJI fell
32.6 points, or 0.09%, to 34,745.16, the S&P 500 .SPX lost
44.09 points, or 1.04%, to 4,188.51 and the Nasdaq Composite
.IXIC dropped 350.38 points, or 2.55%, to 13,401.86.
First-quarter reporting season has entered the home stretch,
with 439 of the companies in the S&P 500 having reported as of
Friday. Of those, 87% have beaten consensus expectations,
according to Refinitiv IBES.
Analysts now see year-on-year S&P earnings growth of 50.4%
on aggregate, more than double the rate forecast at the
beginning of April and significantly better than the 16%
first-quarter growth expected on January 1, per Refinitiv
Hotel operator Marriott International Inc MAR.O missed
quarterly profit and revenue expectations due to weak U.S.
bookings which offset a rebound in China.
Its rival Wynn Resorts Ltd WYNN.O is expected to report
after the bell.
Electric vehicle stocks put on the brakes, with Tesla Inc
TSLA.O and Fisker Inc FSR.N losing ground after Workhorse
Group WKHS.O missed quarterly revenue expectations.
FireEye FEYE.O advanced after industry sources identified
the cybersecurity firm as among those helping Colonial Pipeline
recover from the recent cyberattack.