US STOCKS-Wall St rallies to higher close as inflation data feeds Fed pause hopes

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13/04/2023 21:25

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        * 
      U.S. weekly jobless claims increase
    

        * 
      Producer prices data cooler than expected
    

        * 
      Netflix jumps after Wedbush sees revenue growth
    

        * 
      Harley-Davidson dips as CFO steps down
    

        * 
      Indexes up: Dow 1.14%, S&P 1.33%, Nasdaq 1.99%
    

  
 (Updates with closing prices)
    By Stephen Culp
       NEW YORK, April 13 (Reuters) - U.S. stocks ended sharply
higher on Thursday as economic data showed cooling inflation and
a loosening labor market, fueling optimism that the Federal
Reserve could be nearing the end of its aggressive interest rate
hike cycle.
        All three major U.S. stock indexes surged more than 1%,
with interest rate sensitive megacaps including Apple Inc
 AAPL.O , Microsoft Corp  MSFT.O  and Amazon.com  AMZN.O 
providing the most upside muscle and pushing the tech-heavy
Nasdaq up nearly 2% to its biggest one-day percentage jump in
nearly a month.
    Data released before the bell showed a steeper-than-expected
cooldown in producer prices and new claims for jobless benefits
coming in above consensus. Both signal that the Fed's hawkish
barrage of rate hikes, which began over a year ago, is working
as intended.
    The data comes on the heels of Wednesday's muted Consumer
Price Index report, which cemented the likelihood of yet another
25 basis point rate hike at the conclusion of next month's
Federal Open Market Committee policy meeting.
    "Markets rallied today following the lower inflation data
this morning, as it's still all about the Fed so it's really all
about inflation," said David Carter, investment specialist at
JPMorgan Private Bank in New York.
    "Together with yesterday's muted CPI data, PPI is also
suggesting some slowdown in inflation which could mean a quick
end to Fed tightening."
    Financial markets are pricing in a roughly one-in-three
probability that the central bank will press the pause button
and let the Fed funds target rate stand in the 4.75% to 5.00%
range, according to CME's FedWatch tool.
    Investor focus now shifts to first-quarter earnings season,
which jumps into full swing on Friday when a trio of big banks,
Citigroup  C.N , JPMorgan Chase & Co  JPM.N , Wells Fargo & Co
 WFC.N  report.
    "Tomorrow's bank earnings could give insight into the
strength of regional banks and future lending activity," Carter
added. "It will be interesting to see what banks say tomorrow
about future economic growth."
    Analysts expect aggregate first-quarter S&P 500 earnings to
come in 5.2% below the year-ago quarter, a stark reversal from
the 1.4% year-on-year growth seen at the beginning of the
quarter, according to Refinitiv.
    The Dow Jones Industrial Average  .DJI  rose 383.19 points,
or 1.14%, to 34,029.69; the S&P 500  .SPX  gained 54.27 points,
or 1.33%, at 4,146.22; and the Nasdaq Composite  .IXIC  added
236.94 points, or 1.99%, at 12,166.27.
        Among the 11 major sectors of the S&P 500, all but real
estate  .SPLRCR  ended the session higher, with communication
services  .SPLRCL  and consumer discretionary  .SPLRCD  enjoying
the largest gains, both jumping 2.3%.
  
        Delta Air Lines Inc  DAL.N  shares fell 
    1.1
    % following the company's 
    first-quarter profit miss
    .
  
        Shares of Harley-Davidson Inc  HOG.N  slid 
    1.7
    % after the motorcycle maker 
    announced
     Chief Financial Officer Gina Goetter was leaving the
company at the end of April.
  
        Groupon Inc  GRPN.O  jumped 
    4.0
    % after the company 
    appointed
     Jiri Ponrt to succeed Damien Schmitz as chief financial
officer.
  
        Netflix Inc  NFLX.O  rose 
    4.6
    % after 
    Wedbush
     said the streaming platform's revenue growth of new
subscribers could drive up profitability.
  
        Advancing issues outnumbered decliners on the NYSE by a
2.71-to-1 ratio; on Nasdaq, a 2.55-to-1 ratio favored advancers.
  
        The S&P 500 posted 12 new 52-week highs and one new low;
the Nasdaq Composite recorded 69 new highs and 140 new lows. 
  
        Volume on U.S. exchanges was 10.40 billion shares,
compared with the 11.51 billion average over the last 20 trading
days.     
  


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Inflation    https://tmsnrt.rs/3KUFKgS
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 (Reporting by Stephen Culp; Additional reporting by Sruthi
Shankar and Ankika Biswas in Bengaluru; Editing by Richard
Chang)
 ((stephen.culp@thomsonreuters.com; 646-223-6076;))