Carvana Plummets 43%

Analysts say used vehicle chain's bankruptcy risk is rising
By Newser Editors and Wire Services
Posted Dec 7, 2022 3:34 PM CST
Carvana Plunges 43% Amid Bankruptcy Fears
A Carvana car retail "vending machine" and vehicle parking lot are seen from a drone in South Fayette, Pa., on March 15, 2021.   (AP Photo/Ted Shaffrey, File)

More weakness in tech stocks sent Wall Street mostly lower after another day of wobbly trading Wednesday. The S&P 500 fell 7.34 points, or 0.2%, to 3,933.92. The Dow Jones Industrial Average rose 1.58 points, or less than 0.1%, to 33,597.92. The Nasdaq fell 56.34 points, or 0.5%, to 10,958.55. Treasury yields fell. Carvana plunged 42.9% after analysts at Wedbush Securities warned that the used vehicle chain's bankruptcy risk is rising, the AP reports. The company has lost 98% of its value since the beginning of the year.

Technology and communication services stocks were the biggest weights on the benchmark S&P 500 index. Apple fell 1.4% and Google parent Alphabet was down 2.1%. Health care stocks were among the few bright spots. Pfizer rose 1.1%. Investors rewarded several companies for solid earnings reports. Campbell Soup rose 6% after reporting strong results. Inflation, the Fed's aggressive interest rate increases, and recession worries remain the big concerns for Wall Street. Economic updates later this week could give investors more insight into inflation's path ahead and how the Fed will continue fighting high prices.

The US will release data on weekly unemployment claims on Thursday. The jobs market has been a strong area of the otherwise slowing economy and that has made it more difficult for the Fed to tame inflation. The government will release a report on wholesale prices Friday that will provide more details on how inflation is affecting businesses. The University of Michigan will release a December survey on consumer sentiment on Friday. The reports do not typically move markets but are receiving elevated attention as they are some of the final data dumps before the Fed meets next week.

(Read more stock market stories.)

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