US STOCKS-Nasdaq leads gains on Wall St on signs of easing inflation

Allkem

10/05/2023 17:25

(Updates prices throughout; adds fresh analyst comment in
paragraphs 5 and 6)

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      April headline CPI rises at an annual rate of 4.9% 
    

        * 
      Occidental slips as Q1 profit misses estimates
    

        * 
      Airbnb drops on weak bookings forecast
    

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      Indexes: Nasdaq up 0.57%, S&P flat, Dow down 0.41% 
    

  
    By Shreyashi Sanyal and Shristi  Achar A
       May 10 (Reuters) - The Nasdaq led gains among Wall
Street's main indexes on Wednesday as a slightly
lower-than-expected increase in inflation last month indicated
that the Federal Reserve's rapid interest rate hikes were
yielding result.      
    The U.S Treasury yields fell while the Nasdaq  .IXIC  jumped
as much as 1.17% to its highest intraday level in more than
eight months, with large-cap tech stocks including Apple Inc
 AAPL.O  and Microsoft Corp  MSFT.O  up about 0.6% and 1%,
respectively.
    The Labor Department's Consumer Price Index (CPI) rose 4.9%
in April from a year ago and compared with expectations of a 5%
increase. Month-over-month CPI in April rose 0.4% after gaining
0.1% in March. 
    Fed funds futures traders are now pricing in a pause in
rates in the central bank's June meeting, and less than a 10%
chance of another 25 basis points hike.  FEDWATCH 
        "The market is pricing in a Fed cut beginning this
summer. While inflation is decelerating, it's not decelerating
at a pace that would justify cutting the Fed funds rate anytime
before the fourth quarter of 2023," said Matthew Palazzolo,
senior investment strategist at Bernstein Private Wealth
Management. 
    "There are some fairly encouraging signs underneath the
surface when you look at the release. That should be viewed
somewhat positively by markets, but muted to a certain extent by
some of the risks...most notably the debt ceiling issue."
    Talks on raising the U.S. federal government's $31.4
trillion debt ceiling entered a new phase on Wednesday as some
areas of potential compromise emerged after Tuesday's White
House meeting.       
    At 12:07 p.m. ET, the Dow Jones Industrial Average  .DJI 
was down 136.11 points, or 0.41%, at 33,425.70, the S&P 500
 .SPX  was up 2.17 points, or 0.05%, at 4,121.34, and the Nasdaq
Composite  .IXIC  was up 69.54 points, or 0.57%, at 12,249.09.  
 
    The rate-sensitive S&P 500 technology sector index  .SPLRCT 
rose 0.9%, while communication services  .SPLRCL  rose
0.2%.     
    Regional bank shares extended declines from volatile
sessions last week on concerns about the sector's health.
PacWest Bancorp  PACW.O  lost 2%, while Zions Bancorporation
 ZION.O  and Western Alliance Bank  WAL.N  inched lower 1.8% and
0.2%, respectively.  
    Alphabet Inc  GOOGL.O  gained 1.1% as the Google-parent was
set to unveil more artificial intelligence in its products to
answer the latest competition from Microsoft.
    Oil and gas producer Occidental Petroleum Corp  OXY.N  fell
3.6% after its first-quarter earnings fell short of analysts'
estimates.      
    Livent Corp  LTHM.N  added 5.4% after Australian lithium
miner Allkem Ltd  AKE.AX  agreed to merge with the U.S.-based
chemical manufacturing firm to create a $10.6 billion firm.  
    Airbnb Inc  ABNB.O  lost 10% as the vacation rental booking
company saw fewer bookings and lower average daily rates in the
second quarter. 
    Rivian Automotive  RIVN.O  jumped 4.6% after the EV maker
beat first-quarter results estimates and reiterated its annual
production forecast.  
    Advancing issues outnumbered decliners by a 1.14-to-1 ratio
on the NYSE and by a 1.20-to-1 ratio on the Nasdaq.
    The S&P index recorded 13 new 52-week highs and eight new
lows, while the Nasdaq recorded 66 new highs and 101 new lows.
    
     
  

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
As goods inflation eases, services step in As goods inflation
eases, services step in    https://tmsnrt.rs/3NBTf3Z
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Shreyashi Sanyal and Shristi Achar A in
Bengaluru; Editing by Anil D'Silva and Arun Koyyur)
 ((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961
144 3740; Twitter: https://twitter.com/s_shreyashi;))