FILE PHOTO: People are seen on Wall Street outside the New York Stock Exchange (NYSE) in New York City, U.S., March 19, 2021. REUTERS/Brendan McDermid/File Photo
May 28, 2021
By Medha Singh and Shashank Nayar
(Reuters) – Wall Street’s major averages rose on Friday as investors shrugged off data showing a jump in inflation, although recent worries about a spike in prices kept the S&P 500 on course for its smallest monthly gain since February.
Consumer prices as measured by the personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, rose 0.7% in April after a 0.4% increase in March. Economists polled by Reuters had expected a 0.6% gain.
In the 12 months through April, the so-called core PCE price index vaulted 3.1%, blowing past the Federal Reserve’s 2% target and reflecting pent-up demand as the economy reopens.
“The market is less concerned about the inflation numbers and more interested in the fact that the reopening of the economy would lead to better corporate performance,” said Rick Meckler, partner at Cherry Lane Investments in New Jersey.
“Recent commentary from the Fed has helped calm inflationary fears.”
Technology stocks provided the biggest boost to the S&P 500, with Salesforce.com Inc adding 6% after raising its full-year forecast for revenue and profit, helped by increased demand for its cloud-based software during the pandemic.
With the S&P 500 now hovering less than 1% below its record high hit earlier this month, many big banks have warned of a pause in a year-long Wall Street rally that has been led mainly by heavyweight technology stocks including Apple Inc and Amazon.com Inc.
Investors are also hedging against market volatility as summer approaches. Strategists expect the S&P 500 to end the year at 4,300 points, according to a Reuters poll, about 100 points above its closing price on Thursday.
The U.S. stock market will remain shut on Monday for Memorial Day holiday.
At 12:08 p.m. ET, the Dow Jones Industrial Average rose 125.69 points, or 0.36%, to 34,590.33, the S&P 500 gained 16.56 points, or 0.39%, to 4,217.44 and the Nasdaq Composite gained 78.95 points, or 0.57%, to 13,815.23.
The White House on Friday will present President Joe Biden’s budget for trillions of dollars in spending on infrastructure, education and other initiatives, but the plan is unlikely to sway Republicans who want to tamp down U.S. government spending.
Dell Technologies Inc and HP Inc reported quarterly revenue that beat Wall Street estimates but their shares fell 1.7% and 8%, respectively after they warned that the ongoing computer chip shortage could impact its ability to meet demand for laptops this year.
Boeing Co fell 1.8% after reports said it halted deliveries of its 787 Dreamliners, adding fresh delays for customers following a recent five-month delivery suspension due to production problems.
Advancing issues outnumbered decliners by a 1.4-to-1 ratio on the NYSE and by a 1.2-to-1 ratio on the Nasdaq.
The S&P 500 posted 22 new 52-week highs and one new low, while the Nasdaq recorded 134 new highs and 26 new lows.
(Reporting by Medha Singh in Bengaluru; Editing by Subhranshu Sahu and Maju Samuel)
Source: One America News Network
