Soaring

Car Prices Are Soaring. Why Are Car Dealer Stocks Down?

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Used cars at Frank Bent’s Wholesale Motors in El Cerrito, Calif.


Justin Sullivan/Getty Images

Inflation data surprised to the upside Wednesday. That’s one estimate “beat” investors didn’t want to see. But a big reason for higher-than-expected inflation was car prices, which are soaring.

That should be a good thing for car-dealer stocks. But they are down on Wednesday.

Shares of online car dealers

Carvana

(ticker: CVNA) and

Vroom

(VRM) are down 5.9% and 2.3%, respectively, in recent trading. That compares with 1.3% and 1% respective drops in the

S&P 500

and

Dow Jones Industrial Average.

Traditional dealer and car-information provider stocks are weak Wednesday as well.

AutoNation

(AN),

CarMax

(KMX), and

Sonic Automotive

(SAH) shares are down about 2% on average. Shares of auto-data providers

Cars.com

(CARS),

CarGurus

(CARG), and

TrueCar

(TRUE) are down roughly 3%.

This feels wrong. Brokerages are spread businesses buying and selling

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