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Wall Street Opens Mixed; Tesla Stars but Apple Weighs; Dow Down 150 Pts


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By Geoffrey Smith — U.S. stock markets opened mixed on Monday, with news of a stock split by Tesla (NASDAQ:TSLA) supporting a market that was otherwise burdened by rising bond yields and signs of an inflation-driven slowdown in consumer spending. 

By 9:45 AM ET (1345 GM), the Dow Jones Industrial Average was down 156 points, or 0.5%, at 34,705 points. The broader S&P 500, however, was down less than 0.1% and the Nasdaq Composite was up 0.7%.

The most eye-catching early move was by Tesla stock, which gained 6.0% to its highest in over two months after the electric vehicle maker said it intends to split its stock, a move that typically makes it more attractive to small investors. To what extent that still holds in an age where electronic brokerages routinely offer fractional stocks isn’t entirely clear. The news was, in any case, offset by the fact that Tesla’s factory in Shanghai is set to remain shut this week due to rolling lockdowns imposed across the city of 25 million people. The factory currently produces just under 10,000 vehicles per week.

Over the last two weeks, stocks have made up more than all the losses they suffered in the wake of Russia’s invasion of Ukraine – and then some. That’s despite a sharp rise in bond yields that threatens to raise capital costs for the economy at large. A string of Federal Reserve officials last week hinted that they would have to accelerate their plans for raising interest rates in order to get inflation back under control.

Bond markets remained under pressure early Monday in New York, with short-dated yields continuing to rise, although longer-maturity yields eased on the back of growing confidence that the Fed won’t fall any further behind the curve on inflation.

Inflation was behind one of the other main pieces of news from the weekend: the Japanese newspaper The Nikkei reported that Apple (NASDAQ:AAPL) intends to cut production of its iPhone SE, AirPods and other hardware in response to weakening demand for products whose prices have always carried a substantial premium. Apple was, last week, reported to be looking at introducing subscription plans for hardware, another move that suggested that customers are starting to balk at high prices. 

Elsewhere, Poly (NYSE:POLY) stock rose 50% after HP (NYSE:HPQ) agreed to buy the maker of working-from-home apps in a deal worth $3.1 billion, including debt. 

Oil and gas stocks retreated as crude prices came off their recent highs in response to the news of Shanghai’s lockdowns, which will ban private cars from the streets while they last. The lockdowns, while not as severe as those seen in China at the start of the pandemic, are emblematic of what is now a countrywide struggle with the less dangerous but more transmissible strains of COVID-19 that have developed since the first wave of the virus in Wuhan two years ago.

Exxon Mobil (NYSE:XOM) stock fell 3.4%, while Occidental Petroleum (NYSE:OXY) stock and Devon Energy (NYSE:DVN) stock both fell 4.1%.

Wall Street Opens Mixed; Tesla Stars but Apple Weighs; Dow Down 150 Pts

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