US STOCKS-Wall Street boasts record closes as inflation data fuels rate-cut bets

KOSS

15/05/2024 21:44

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      Consumer prices rise less than expected in April; core CPI
slows
    

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      Retail sales flat in April 
    

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      Meme stocks snap sharp rally
    

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      Indexes up: Dow 0.88%, S&P 1.17%, Nasdaq 1.40%
    

  
 (Updates with final closing prices, volume data)
    By Sinéad Carew and Bansari Mayur Kamdar
       May 15 (Reuters) - 
    Wall Street's three major indexes notched record closes on
Wednesday with the benchmark S&P 500  .SPX  and the Nasdaq
 .IXIC  both advancing more than 1%, after a
smaller-than-expected rise in consumer inflation bolstered
investors' hopes for interest rate cuts by the Federal Reserve.
        All three indexes hit intraday record highs with
technology stocks leading the charge. The blue-chip Dow  .DJI 
drew closer to the 40,000 milestone.
  
    Tepid U.S. Consumer Price Index (CPI) data for April fueled
optimism that inflation was easing after three months of
higher-than-expected numbers. This led traders to raise bets
that the Fed will cut its policy rate in September and December.
    "It's a relief we didn't have a fourth hot CPI report," said
Carol Schleif, chief investment officer at the BMO family office
 in Minneapolis. "Clearly markets liked that the inflation
numbers looked softer. Retail sales came in softer. It's pretty
clear evidence that the economy came off the boil and is
operating at a more sustainable pace."
    Other data released on Wednesday showed U.S. retail sales
were unexpectedly flat in April as higher gasoline prices pulled
expenditure away from other goods, indicating that consumer
spending was losing momentum.
    The Dow Jones Industrial Average  .DJI  rose 349.89 points,
or 0.88%, to 39,908.00 while the S&P 500  .SPX  gained 61.47
points, or 1.17%, at 5,308.15. 
        The Nasdaq Composite  .IXIC  advanced 231.21 points, or
1.40%, to 16,742.39, its second record close in as many days.
The S&P 500 and the Dow last registered record closing prices on
March 28.
  
        Among the S&P 500's 11 major industry sector indexes,
most gained ground with rate-sensitive technology stocks
 .SPLRCT  and real estate  .SPLRCR  outpaced the rest with
respective gains of 2.3% and 1.7%. 
  
        Consumer discretionary  .SPLRCD  was the biggest
laggard, ending the day virtually unchanged from Tuesday.
  
    Equities had built on Tuesday's gains, when Fed Chair Jerome
Powell's assessment of U.S. growth, inflation and the interest
rate outlook reassured investors after hotter-than-expected
producer prices for April.
    Stocks have rallied so far this year on better-than-expected
first-quarter earnings and expectations that the Fed will be
able to cool inflation without damaging growth and eventually
transition to cutting interest rates.
    Among megacap stocks, Nvidia  NVDA.O  was the S&P 500's
biggest index point contributor, rising 3.6%. Microsoft
 MSFT.O , the benchmark's next biggest boost, added 1.7% and
Apple  AAPL.O  advanced 1.2%. 
        Leading S&P 500 percentage gains was a 15.8% advance in
Super Micro Computer Inc  SMCI.O , which like Nvidia is seen as
a good way to bet on the take-off in demand for artificial
intelligence technology. 
  
    In earnings, investors waited for Walmart  WMT.N  to provide
more color on consumer spending in its quarterly report due out
early on Thursday. The retail giant's shares ended down 0.05%,
marking its third straight day of declines.  
    Retail investor darling GameStop  GME.N  ended down 18.9%,
snapping this week's sharp rally driven by "Roaring Kitty" Keith
Gill, a central figure behind the 2021 meme stock frenzy, who
posted bullish comments on social media platform X.
    Other meme stocks followed suit with AMC Entertainment
 AMC.N  dropping 20% and Koss Corp  KOSS.O  ending down 19.2%.
    Trading volume was brisk with 14.78 billion shares changing
hands on U.S. exchanges, according to the latest tally, compared
with the 11.11 billion average for the last 20 sessions.
        Advancing issues outnumbered decliners by a 3.02-to-1
ratio on the NYSE, which had 645 new highs and 40 new lows. 
  
        On the Nasdaq advancing issues outnumbered decliners by
a 1.69-to-1 ratio while it recorded 285 new highs and 76 new
lows. The S&P 500 posted 71 new 52-week highs and no new lows.
  

 (Reporting by Sinéad Carew, Bansari Mayur Kamdar and Shristi
Achar A in Bengaluru; Additional reporting by Ankika Biswas;
Editing by Sriraj Kalluvila, Devika Syamnath, Pooja Desai and
Richard Chang)
 ((sinead.carew@thomsonreuters.com; +13322191897;))