Consumer Companies Suffer as Inflation Rises

The release of new inflation data has sent shockwaves through the consumer industry. According to the Labor Department's report on Tuesday, consumer prices in January rose by 3.1% compared to the previous year. While this represents a slowdown from December's gain of 3.4%, it still surpasses economists' predictions of 2.9%.

Home builders felt the negative impact of this inflation resurgence. The SPDR S&P Homebuilders exchange-traded fund experienced a significant decline of 3.8%, reducing year-to-date gains to approximately 2.5%.

Previously, investors had been optimistic about lower borrowing rates from the Federal Reserve and mortgage rates due to the belief that inflation had been effectively contained. However, this recent increase in inflation has dashed those hopes.

On the other hand, WK Kellogg, a cereal manufacturer, saw a promising boost in its prospects due to the upward inflation trend. The company's shares rallied after announcing a 7.5% price increase that contributed to higher quarterly profits.

While Coca-Cola experienced a decline, it was not as severe as the broader market. The soda company reported a 12% decrease in organic sales, excluding the effects of mergers and currency fluctuations. However, there was a positive indication as underlying case volume rose by 2% compared to the previous year.

Marriott International suffered a fall in shares after its fourth-quarter revenue failed to meet analysts' expectations. Despite this disappointment, the company still managed to achieve an increase in profits for the quarter.

Hasbro, a toy manufacturer, also experienced a decline in shares following poor fourth-quarter results. Consumer and entertainment sales declined sharply, and the company's inventory decreased significantly.

On a positive note, Jetblue Airways saw a surge in shares after activist investor Carl Icahn revealed his approximately 10% stake in the discount carrier.

Additionally, retail giant Walmart has entered into talks to acquire Vizio, a smart television manufacturer, for a reported sum of over $2 billion.