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Wall Street Opens Lower; Tesla Slides on Double Blow; Dow Down 110 Pts

Stock Markets1 hour ago (Apr 19, 2021 09:53AM ET)

(C) Reuters.

By Geoffrey Smith — U.S. stock markets opened lower on Monday, consolidating in the absence of major news after hitting successive record highs last week.

Market sentiment was somewhat unsettled by the spectacle of an abrupt sell-off in cryptocurrencies at the weekend, a reminder of how febrile the atmosphere in financial markets has been at times during the pandemic. There were also concerns at two setbacks for Tesla (NASDAQ:TSLA), which was usual the most actively traded stock in early dealings.

By 9:45 AM ET (1445 GMT), the Dow Jones Industrial Average was down 114 points, or 0.3%, at 34,086 points. The S&P 500 was down 0.2% and the Nasdaq Composite was down 0.1%.

Tesla stock was down over 4% after a single protester at an auto show in China staged a protest against the company, alleging various quality defects, which quickly went viral. Given the tight government control over Chinese social media, and the recent state-orchestrated boycotts against other western companies, suspicions were immediately aroused that the protest was being used by the Chinese authorities to put pressure on Tesla, one of the highest-profile U.S. companies in China. That’s important because China is expected to be Tesla’s largest national market in the years to come.

The protest came after a weekend on which two people died in a crash that cast fresh doubt on the capabilities of Tesla’s ‘Full Self-Driving’ software suite. Neither of the two passengers was in the driver’s seat at the time of the crash, according to police in Harris County, Texas.

Another stock heading lower was Peloton Interactive (NASDAQ:PTON), after a public dispute with U.S. consumer protection regulators over the safety of its Tread+ exercise machine. The Consumer Product Safety Commission issued a unilateral press release at the weekend urging the public not to use the machine, which has been linked to 39 dangerous incidents, including one death. Peloton restated its user guidelines and insisted that the machines are safe if used according to its instructions, but the stock fell 4.4%.

Coinbase (NASDAQ:COIN) stock fell 0.9%, paring overnight losses after the sharp correction in cryptocurrencies appeared to run its course.

Among the gainers was Harley-Davidson Inc (NYSE:HOG) stock, which rose 11% after the company’s guidance suggested a turnaround after a wretched couple of years. The motorcycle maker’s first-quarter earnings showed surprisingly strong orders for its touring bikes.

Also gaining was the preferred stock of British soccer club Manchester United (NYSE:MANU), which rose 8.9% after it and several other leading lights of European soccer revealed plans to break away from Europe’s establishment and form their own league. JPMorgan (NYSE:JPM) was reported to have arranged $6 billion for the league’s founding order to allay any fears they may have had about being expelled from their current national and European competitions.

Elsewhere, GameStop (NYSE:GME) stock rose 8.9% after news that its CEO is stepping down to make way for a more digitally-oriented successor. In addition, reports indicated that one of the most prominent retail investors supporting the stock, known widely as The Roaring Kitty, had exercised a substantial block of call options on the stock.

Wall Street Opens Lower; Tesla Slides on Double Blow; Dow Down 110 Pts

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