Wall St moves higher as inflation data meets estimates

A sign for Wall Street is seen in the financial district in New York
FILE PHOTO: A sign for Wall Street is seen in the financial district in New York, U.S., November 8, 2021. REUTERS / Brendan McDermid

December 10, 2021

By Devik Jain and Shreyashi Sanyal

(Reuters) – U.S. stock indexes edged higher in volatile trade on Friday after data showed consumer prices rose in line with last month’s estimates, easing some pressure on Investors are concerned about the Federal Reserve tightening monetary policy.

The Labor Department report showed that US consumer prices rose 6.8% in the 12 months through November, the highest level since 1982, as prices of goods and services rose across the board amid a lack of supply. limited supply.

The core consumer price index (CPI) rose 4.9% year-on-year after rising 4.6% in October.

Economists polled by Reuters had forecast a 6.8% rise in CPI and a 4.9% increase in core CPI.

Jai Malhi, global market strategist at JP Morgan Asset Management, said: “Today’s rise in US inflation is widely anticipated but it confirms that price pressures continue to mount but also have expandable”.

“This release will not prevent (the Fed) from speeding up the (gradual) process, allowing the central bank to raise rates early next year if required.”

Seven of the 11 major S&P sectors gained, with defensive consumer goods, real estate and utilities largely outperforming, suggesting cautious trading ahead of next week’s Fed policy meeting.

“Right now, we may be seeing investors taking a more defensive approach to finding a safe haven until we find out what the Fed will do next Wednesday,” said Sam Stovall. , investment strategist at CFRA Research said in New York.

The US central bank’s policy meeting will be closely watched for comment on the roadmap for next year’s rate hikes as well as the pace of bond buying dwindling.

A Reuters poll of economists predicts the Fed will raise rates by 25 basis points to 0.25-0.50% in the third quarter of next year, followed by another in the next quarter. 4. However, most see the risk of a spike even earlier.

At 12:24 p.m. ET, the Dow Jones Industrial Average was up 66.47 points, or 0.19%, to 35,821.16, the S&P 500 was up 24.22 points, or 0.52%, at 4,691.67 and the Nasdaq Composite were up 46.67 points, or 0.30 percent, at 15,564.04.

Shares of Oracle Corp rose 16% after the enterprise software maker forecast a positive third-quarter outlook.

The S&P 500 is down 5.2 percent from its record high on Nov. 22 as investors spot Jerome Powell stepping down as Fed chair, his hawkish comments to address mounting price pressures increase and the discovery of the coronavirus variant Omicron.

Pfizer and BioNTech’s aggressive updates on their vaccines offering some protection against the latest variant have helped push the three major indexes to more than 3% weekly gains this week. The S&P is now down 1.2% from its all-time high.

Mega-cap tech companies like Apple Inc and Microsoft Corp gained 1.3% and 1.7% respectively, providing the biggest boost to the major indexes.

Broadcom Inc jumped 8.0% as the semiconductor company posted first-quarter revenue that beat Wall Street expectations and announced a $10 billion share buyback plan.

Issues fell more than advancers at a ratio of 1.18 to 1 on the NYSE and 1.50 to 1 on the Nasdaq.

The S&P index recorded 30 new 52-week highs and one new low, while the Nasdaq recorded 22 new highs and 113 new lows.

(Reporting by Devik Jain, Shreyashi Sanyal and Bansari Mayur Kamdar in Bengaluru; Editing by Maju Samuel) Wall St moves higher as inflation data meets estimates

Bobby Allyn

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